Food commodity price volatility and food insecurity

The paper first reviews several issues relevant to global food commodity market volatility as it pertains to food security, and food importing developing countries, and then discusses international and national policies and measures to prevent or manage this volatility and related risks. It is shown that market volatility relates to unpredictability of market fundamentals, and price spikes occur when unpredictability increases excessively. The food security risks faced by food import developing countries are discussed and it is highlighted that the major risks involve not only large and unpredictable price variations but also trade finance as well as import contract enforcement. The problem of identifying a price spike is analyzed and it is seen that, despite difficulties in commodity modeling, there are empirical techniques that allow the assessment of the probabilities of price spikes, and could facilitate the triggering of responses. Suggestions are made concerning institutions and policies to assist developing countries better cope with the risks of commodity market volatility.


Issue Date:
2013-12
Publication Type:
Journal Article
DOI and Other Identifiers:
10.22004/ag.econ.162072
ISSN 2280-6180 (print) ISSN 2280-6172 (online) (Other)
Record Identifier:
https://ageconsearch.umn.edu/record/162072
PURL Identifier:
http://purl.umn.edu/162072
Published in:
Bio-based and Applied Economics Journal, 02, 3
Page range:
213-236
Total Pages:
24
JEL Codes:
Q11; Q17; Q18




 Record created 2017-04-01, last modified 2020-10-28

Fulltext:
Download fulltext
PDF

Rate this document:

Rate this document:
1
2
3
 
(Not yet reviewed)