Cereal Prices Research Articles

Price Volatility and Cereal Food Security in Tunisia: Determining the Critical Threshold of Cereal Price Volatility Using the Threshold Model

This study examines the substantial impact of grain price volatility on food security in Tunisia, a nation heavily reliant on cereal consumption. Employing Hansen's (1999) threshold model, we pinpoint the precise level of price volatility that poses a significant threat to cereal food security in Tunisia. A novel application of this methodology, our analysis, spanning 1991-2021, focuses on cereals, constituting over 50% of Tunisia's food imports. The threshold model identifies a critical volatility threshold of 4.65%. Beyond this point, food security is significantly compromised. This finding underscores the study's capacity to quantify the precise level of grain price volatility that exacerbates food security risks in Tunisia. To mitigate these risks, policymakers should prioritize price stabilization measures, enhance risk management and storage mechanisms, and develop targeted adaptation strategies for vulnerable populations. These actions will bolster the resilience of the Tunisian food system.

Do increases in gasoline prices cause higher food prices?

This paper studies the effect of gasoline price shocks on food prices. We use data on the prices of aggregate and disaggregate food products to estimate a partially identified structural vector autoregressive model using Bayesian methods. We found that a positive gasoline price shock leads to a significant increase in the aggregate food price along with the prices of disaggregated retail food items. Furthermore, we found that higher gasoline prices trigger a significant increase in the price of fertilizers and animal feed leading to an increase in the cost of producing food products. Our results, however, suggest that higher gasoline prices do not significantly increase the food marketing cost. Finally, we conduct a historical counterfactual analysis and find that higher gasoline prices contributed to the increase in the aggregate food price as well as the prices of cereals and dairy products during the 2005–2007 period and following the onset of the Russia–Ukraine conflict.

Mortality among populations affected by armed conflict in northeast Nigeria, 2016 to 2019

Armed conflict, displacement and food insecurity have affected Adamawa, Borno, and Yobe states of northeast Nigeria (population ≈ 12 million) since 2009. Insecurity escalated in 2013 to 2015, but the humanitarian response was delayed and the crisis' health impact was unquantified due to incomplete death registration and limited ground access. We estimated mortality attributable to this crisis using a small-area estimation approach that circumvented these challenges. We fitted a mixed effects model to household mortality data collected as part of 70 ground surveys implemented by humanitarian actors. Model predictors, drawn from existing data, included livelihood typology, staple cereal price, vaccination geocoverage, and humanitarian actor presence. To project accurate death tolls, we reconstructed population denominators based on forced displacement. We used the model and population estimates to project mortality under observed conditions and varying assumed counterfactual conditions, had there been no crisis, with the difference providing excess mortality. Death rates were highly elevated across most ground surveys, with net negative household migration. Between April 2016 and December 2019, we projected 490,000 excess deaths (230,000 children under 5 y) in the most likely counterfactual scenario, with a range from 90,000 (best-case) to 550,000 (worst-case). Death rates were two to three times higher than counterfactual levels, double the projected national rate, and highest in 2016 to 2017. Despite limited scope (we could not study the situation before 2016 or in neighboring affected countries), our findings suggest a staggering health impact of this crisis. Further studies to document mortality in this and other crises are needed to guide decision-making and memorialize their human toll.

RUSSIAN INVASION IN UKRAINE: CHALLENGES AND IMPLICATIONS FOR FOOD SECURITY

In a global framework disrupted by instability and conflict, both from a social and economic perspective, the primary human needs of the populations are the ones that the policy makers and researchers should keep at the top of their agenda. Therefore, the problem of food security worldwide imposes itself as a very stringent aspect to take into account when evaluating the implications of the current global turbulences. The primary objective of the present article is to review, based on the information available at the regional and global level, the impact of the Russian invasion in Ukraine on food security, and to provide some helpful insights to world leaders whose responsibility is to elaborate adequate policies that minimize the negative consequences of this military conflict, especially considering food shortages. After an in-depth analysis, we identified the fact that the war negatively impacted the agricultural sector, adding on the pressures generated by the Covid-19 pandemic, inflation, and climate change. Although at the regional level, as in the case of the EU, there have not yet been any situations of food insecurity, globally, in the case of countries with a high degree of dependence on food aid and food commodity imports, food insecurity started to manifest since May 2022 putting under risk a considerable part of the population. The results also revealed that, at the global level, the four dimensions of food security – availability, access, utilization and stability – have been affected both in the short and in the long term. Both globally and at the EU level, there have been changes regarding cereal prices, quantity produced, export, and import levels. The EU – Ukraine solidarity corridors were among the methods implemented to reduce the impact of the war on the agricultural sector, and mainly to avoid a possible world crisis and the deepening of food insecurity challenge.

The impacts of reforming agricultural policy support on cereal prices: a CGE modeling approach

PurposeThis paper investigates the effects of the total abolition of all forms of agricultural subsidies to producers and border tariffs on the prices of staple cereals.Design/methodology/approachThe authors use the GTAP global economy-wide model and focus on 27 countries and 8 regions. The GTAP database that is used contains information on budgetary transfers to producers and market price support such as domestic price support, tariffs, export subsidies, quotas on exports or imports and other border measures.FindingsThe removal of subsidies is estimated to significantly increase the prices of wheat and other cereal grains in Japan, paddy rice in Malaysia and Indonesia, processed rice in Malaysia and Indonesia and wheat in Brazil and India. When border tariffs are removed, cereal prices are projected to fall in several countries, but the decline is more pronounced for wheat in Kenya and Japan, other cereal grains in South Korea and all staples in Nepal.Research limitations/implicationsThe alternative scenarios on the removal of agricultural subsidies in all agricultural sectors and the elimination of border tariffs are purely speculative as the analysis ignores important political economy considerations of agricultural and food policy reforms.Practical implicationsThe findings from this study point to the importance of implementing additional policy measures to mitigate the possible negative effect of repurposing the support to agriculture and ensure the food security and welfare of those categories of buyers who heavily depend on the price of staple food for their livelihoods.Social implicationsThis study’s findings confirm that the elimination of agricultural subsidies would impact global food security directly by making staple food less affordable to the poorest and indirectly by decreasing the available household budget for other presumably more nutritious food groups. Consequently, it is expected that these price increases could make segments of the world population poorer, particularly the net-food buyers due to a decline in their real income.Originality/valueThe authors assess the impact of removing the subsidies on the economy in a comprehensive way, particularly given the recent policy focus on net zero emissions and Sustainable Development Goals that include healthy foods. The authors also consider the counter effects of tariff reduction on this, which is price-reducing.

Stochastic properties of nonlinear locally-nonstationary filters

This article delivers conditions for the existence of a unique stationary, ergodic and φ-mixing invertible solution for nonlinear time-varying parameter models that are locally non-stationary or explosive. The assumptions are different from existing conditions as they do not impose Lipschitz, bounded growth or drift restrictions. Instead we require that the time series contains resetting dynamics. These dynamics are present in time series with sudden changes, such as stock prices with financial bubbles. We explain how our results can be applied to multiple models with time-varying conditional mean and time-varying conditional variance. Additionally, we show the empirical relevance of locally non-stationary models by developing a robust score-driven locally-nonstationary location model that allows us to identify price bubbles. In particular, we revisit the early warning system for Alert of Price Spikes (ALPS) developed by the World Food Programme (WFP, 2014). Our model is able to correctly identify price bubbles both in-sample and out-of-sample. We show that this information can be crucially relevant for the Global Information Early Warning System of the Food and Agriculture Organization (GIEWS) of the United Nations which identifies market bubbles in prices of grains and cereals in order to manage and prevent impending food crises in developing countries.

Macroeconomic Effects of Grain Price Volatility in Morocco

This paper investigate how cereal price volatility impacts import bill, tax revenue and foreign exchange reserves in Morocco. It uses GARCH family models to characterize the price and exchange rate volatility functions, ARDL model and Toda and Yamamoto's (1995) causality test to study respectively cointegration and causal relationship. Based on monthly data between January 1999 and December 2019, we find that 1% increase of price volatility and volatility-import leads to respectively increase the import bill by 0.07% and 16.7% on the long run. Meantime, the short-run estimates suggest that the effects of price volatility and the volatility-import level are negative meaning that the lagged value of these variables will have a positive impact on the next month's import bill. Thus, we assume that price volatility should be heavier on the import bill when the annual production is low. Our results also indicate that cereals price volatility can induce serious consequences because it directly causes an increase in the overall import bill and indirectly influences import tax revenues and foreign exchange reserves, especially when it is associated with a poor domestic harvest.

Linkages between natural gas, fertiliser and cereal prices: A note

AbstractWe use structural vector autoregressions to analyse the dynamic effects of shocks to natural gas and nitrogenous fertiliser prices on three major cereal crops: maize, rice and wheat. We find that the response of cereal prices to natural gas and fertiliser price shocks has been relatively small, instantaneous and transitory. These findings suggest that crop prices may change rapidly in response to energy and fertiliser prices, even when there are no shifts in the underlying fundamentals in crop markets. Furthermore, because the effects of the shocks dissipate rather quickly, short‐term measures to address swings in food prices may suffice.

Land-use patterns of energy crops in the agricultural landscape

Lignocellulosic energy crops can produce substantial amounts of biomass for energy purposes, but their introduction implies land-use changes as they are mainly cultivated in agriculturally dominated landscapes. This thesis presents a land-use analysis of lignocellulosic energy crops in the agricultural landscape in Sweden, specifically aiming to i) assess different energy crops’ regarding production, location and climatic profiles, ii) characterise and define the surrounding agricultural landscape, and iii) study the overall land-use changes derived from the establishment of energy crops in the country. The analysis is based on empirical data from commercial fast-growing tree plantations (willow, poplar, and hybrid aspen) and energy grasses (reed canary grass) at multiple spatial scales from field to landscape level, during the period 1986-2018. At field level, there is a trend for smaller and more regular fields dedicated to energy crops, with cultivation patterns moving towards more productive lands, reflecting an intensification in the land-use management. Willow was initially established mainly on fallow lands, but many plantations were subsequently replaced by cereals due to changes in global cereal prices. In the case of grasses, this pattern was similar, although changes appeared later and not so markedly. At landscape level, energy crops significantly diversify the agricultural landscape, as fast-growing tree plantations are largely introduced in cereal areas and grasses in forest-dominated landscapes. The methods and analysis of this thesis contribute to a better understanding of land-use changes associated to energy crops, and help define their contribution to diversifying the agricultural landscape.

Evaluating cereal market (dis)integration in less developed and fragile markets: The case of Sudan

This paper evaluates spatial market integration in cereal markets in Sudan, focusing on wheat and sorghum, two major cereal crops. Sudan’s context provides important insights on the functioning of markets in economies marred by sanctions, conflicts, soaring inflation, and macroeconomic imbalances. We use long-ranging monthly cereal price data and a vector of error-correction cointegration model (VECM) to characterize both short-term and long-term spatial price adjustment across cereal markets. Among the 15 wheat and 18 sorghum markets considered, we can only detect significant spatial market integration among 6 wheat and 11 sorghum markets. Despite some strong spatial market integration among a few neighboring markets, there is no spatial market integration between several markets, including between major wheat consumption and production hotspots. For example, cereal markets in Darfur are not integrated with cereal markets in the rest of the country, despite exhibiting some level of spatial integration within the Darfur region. Finally, we also observe relatively stronger spatial market integration in sorghum markets than in wheat markets. These findings have important policy implications for improving the efficiency of cereal markets in Sudan and other comparable settings.

B. M. Bhatia. Indian Agriculture: A Policy Perspective. New'Delhi: Sage Publications India Pvt. Ud., 1988.191 pp.Rupees (Indian) 140.00 (Hardbound Edition).

India is self-sufficient in the production of foodgrains, and in good years has substantial exportable surpluses. This is no small achievement for a country which, in the late Sixties, had to import as much as 13 percent of its requirements of foodgrains. The turnaround came as a result of the distribution of high-yielding seeds, fertilizer, modern agricultural technology, and provision of extension services. But agricultural growth has remained concentrated in the north-west of the country, which is well-endowed with infrastructures like irrigation, rural electrification, roads, markets, etc. By one estimate, these areas, which account for less than 15 percent of the total area under foodgrains cultivation in the country, have contributed as much as 56 percent of the increase in foodgrain production in the post-green· revolution period. No doubt, this has led to an increase in the regional disparities as well. Another serious imbalance in Indian agriculture has arisen because of cropwise disparities in growth, between foodgrains and non-foodgrains on the one hand, and among different foodgrains on the other. About 70 percent of the total cultivated area in the country is rain-fed, which contributes a large proportion of the total output of important crops like cereals, pulses, oilseeds, and cotton; and over 40 percent of the total food grains production of the country. But productivity in these areas is low and fluctuates according to the amount of rainfall. Dr Bhatia shows that stagnation in the agriculture sector has coincided not only with adverse weather conditions but also with adverse inputoutput price ratios, particularly between fertilizer and procurement prices of cereals.

Agricultural windfalls and the seasonality of political violence in Africa

AbstractWhen the prices of cereal grains rise, social unrest and conflict become likely. In rural areas, the predation motives of perpetrators can explain the positive relationship between prices and conflict. Predation happens at places and in periods where and when spoils to be appropriated are available. In predominantly agrarian societies, such opportune times align with the harvest season. Does the seasonality of agricultural income lead to the seasonality of conflict? We address this question by analyzing over 55 thousand incidents involving violence against civilians staged by paramilitary groups across Africa during the 1997–2020 period. We investigate the crop year pattern of violence in response to agricultural income shocks via changes in international cereal prices. We find that a year‐on‐year one standard deviation annual growth of the price of the major cereal grain results in a harvest‐time spike in violence by militias in areas where this cereal grain is grown. This translates to a nearly 10% increase in violence during the early postharvest season. We observe no such change in violence by state forces or rebel groups—the other two notable actors. By further investigating the mechanisms, we show that the violence by militias is amplified after plausibly rich harvest seasons when the value of spoils to be appropriated is higher. By focusing on harvest‐related seasonality of conflict, as well as actors more likely to be involved in violence against civilians, we contribute to the growing literature on the economic causes of conflict in predominantly agrarian societies.

Opportunities for variable rate application of nitrogen under spatial water variations in rainfed wheat systems—an economic analysis

In fields of undulating topography, where rainfed crops experience different degrees of water stress caused by spatial water variations, yields vary spatially within the same field, thus offering opportunities for variable rate application (VRA) of nitrogen fertilizer. This study assessed the spatial variations of yield gaps caused by lateral flows from high to low points, for rainfed wheat grown in Córdoba, Spain, over six consecutive seasons (2016–2021). The economic implications associated with multiple scenarios of VRA adoption were explored through a case study and recommendations were proposed. Both farm size (i.e., annual sown area) and topographic structure impacted the dynamics of investment returns. Under current policy-price conditions, VRA adoption would have an economic advantage in farms similar to that of the case study with an annual sown area greater than 567 ha year−1. Nevertheless, current trends in energy prices, transportation costs and impacts on both cereal prices and fertilizers costs enhance the viability of VRA adoption for a wider population of farm types. The profitability of adopting VRA improves under such scenarios and, in the absence of additional policy support, the minimum area for adoption of VRA decreases to a range of 68–177 ha year−1. The combination of price increases with the introduction of an additional subsidy on crop area could substantially lower the adoption threshold down to 46 ha year−1, making VRA technology economically viable for a much wider population of farmers.

Bread Surplus: A Cumulative Waste or a Staple Material for High-Value Products?

Food waste has been widely valorized in the past years in order to develop eco-friendly materials. Among others, bread waste is currently of increasing interest, as it is considered a huge global issue with serious environmental impacts and significant economic losses that have become even greater in the post-pandemic years due to an increase in cereal prices, which has led to higher production costs and bread prices. Owing to its richness in polysaccharides, bread waste has been previously studied for its physico-chemical characteristics and its numerous biotechnological applications. The present review highlights the re-use of bread waste and its valorization as a valuable resource by making value-added products through numerous technological processes to increase efficiency at all stages. Many research studies reporting several transformation methods of surplus bread into ethanol, lactic acid, succinic acid, biohydrogen, hydroxymethylfurfural, proteins and pigments, glucose-fructose syrup, aroma compounds, and enzymes are widely discussed. The wide variety of suggested applications for recycling bread waste provides significant insights into the role of technology development in potentially maximizing resource recovery and consequently contributing to environmental performance by reducing the amount of bread waste in landfills.

Global commodity market disruption and the fallout

AbstractThe war in the breadbasket of Europe, which spawned at the heels of the once‐in‐a‐lifetime pandemic, sent major cereal prices spiralling upward. The unprecedented sequence of events leading to and including the war has tested the resilience of global commodity markets and the craftsmanship of policymakers. While the circumstances may differ, the disruption of global commodity markets is not exactly uncharted territory, with many examples and experiences from near and distant history. By showcasing anecdotal and empirical evidence from the past, this study puts the current crisis and its consequences in perspective and offers an outlook with a specific focus on low‐ and middle‐income countries.

Influence of a Financial Crisis and the Covid-19 Pandemic on Prices of Cereals in Poland

This article raises the question of the impact of global crises on the grain price market. Prices of wheat, rye, barley, oat and cereal mixture as well as maize were submitted to analysis. The aim of the study was to determine the influence of a financial crisis and the Covid-19 pandemic on prices of cereals in Poland. Two research hypotheses were put forth. The first one assumed that prices of cereals increased due to the 2007-2009 financial crisis. The second research hypothesis was that the Covid-19 pandemic caused fluctuations on the cereal price market. To verify these hypotheses, an analysis was completed using data from the GUS Central Statistical Office (Statistics Poland) In addition, relevant references from the fields of economics and agriculture were reviewed. Based on this study, it has been concluded that both the 2007-2009 financial crisis and the Covid-19 pandemic had significant effects on prices of cereals in Poland.

Beyond Food Prices: An Analysis On Sub-Indices

The prices of food have increased globally recently. The goal of this chapter is to analyze the dynamics of food prices. The categories of food analyzed in this research are Meat, Dairy, Cereals, Oils, and Sugar. FAO Food index data is used for the period 1990-2021. One of the questions that come to mind is whether these categories of food are all correlated with each other. A critical analysis on these sub-indices helps to understand the relationships between the categories. The results of the study show that there are long term relationships between sub-indices of food prices. Granger causality results indicate that the price of sugar is affecting the price of cereals, whereas cereals are affecting sugar. The price of cereals is therefore important for food price stability according to research results.The results show the need for a planned agricultural policy, subsidies for low income households, and subsidies on energy prices.

Biofuel Production and Its Impact on Global Food Security: A Review Article

The aim of this study is to shed light on the importance of biofuels as an alternative to conventional energy, in addition to the importance of preserving agricultural crops, which are the main source of this fuel, to maintain food security, especially in developing countries. The increase in global oil prices, in addition to the fear of global warming, are among the main factors that draw the world’s attention to searching for alternative sources of traditional energy, which are sustainable on the one hand, and on the other hand reduce carbon emissions. Therefore, the volume of global investment in renewable energy in general, and in liquid biofuels and biomass in particular, has increased. Global fears emerged that the excessive conversion of large farms suitable for growing food to energy production would threaten global food security. In the first ten years of the new millennium, biofuel production increased fivefold, and the largest increase in biofuel production was recorded in 2007-2008, coinciding with a sharp rise in food prices. Compared to the average food prices in the period 2002-2004, the average global prices of cereals, oils and fats traded were 2 to 2.5 times higher in 2008, this continuous increase in the use of food crops to produce biofuels has reflected on global food security. Accordingly, this review article will address previous studies on biofuel production; identify the theoretical framework for the concept of biofuels and its characteristics, and the relationship between biofuels and food security. In this study, we presented biofuels, which are considered one of the important categories in the field of renewable energy and its environmental and economic effects, as well as the experiences of some countries in its production, and the possibility of benefiting from the natural resources available for its production. We will discuss the scientific (chemical) principles of biofuel production.

Food security in South Asia under climate change and economic policies

PurposeThe first purpose of this study is to examine the impacts of climate-caused cereal productivity changes on food security, welfare and GDP in South Asian countries. The second purpose is to assess the agricultural subsidies and South Asia Free Trade Agreement (SAFTA) as policy responses to climate change.Design/methodology/approachThe present study uses the computable general equilibrium (CGE) framework and econometric approach in an integrated manner to examine the economic impacts of climate-caused cereal productivity changes in South Asian countries. An econometric model is used to identify the impact of climate change on cereal yields and CGE approach is used to assess the future effect of climate change through simulations. In this course, the econometric findings are applied to Multiregional Global Trade Analysis Project 10 and then the model is calibrated for future projection.FindingsThe results indicate that there is a decrease in cereals production because of climate change and eventually it increases the prices of cereals, decreases the local consumption and GDP and, as a result, causes a loss in welfare. Subsidies and SAFTA have been found to have no substantial impact on increasing food security in South Asia.Originality/valueThe present study uses the concept of food demand for all cereals in an integrated way and focuses on the fiscal and trade policy responses to climate change.

The Analysis of Seasonal Fluctuations and Correlation Between Monthly Average Exchange Rate of Main Currency and Monthly Average Import Prices of the Main Grain in Armenia

Since 2020 the global economy has faced serious economic and financial challenges due to COVID-19 pandemic. The main purpose of this research is to study the dynamics of the monthly average import prices for the main types of imported grains and monthly average exchange rates for 1 US dollar in 2020-2022 in RA, disclosing the correlation between them. In the studied period the monthly average import price of wheat increased in autumn and in winter months. The results of analysis have shown that in the mentioned period there was a strong non-linear correlation between monthly average exchange rate of 1 US dollar and the average import prices of the main cereals.