Food Price Spikes Research Articles

Strategic Commodity Food Price Volatility of Central Java in 2020-2023

This study aims to analyze the volatility of food prices, especially rice, in Central Java from 2020 to 2023. Food price volatility can have a negative impact on consumer welfare and costs. Indonesia, as a country that still imports basic food needs, is vulnerable to food price volatility. Spikes in food prices can cause inflation to rise and economic growth to decline, which impacts the condition of people’s households, especially the poor. This research uses a quantitative method using ARCH GARCH time series data. The results of this study are expected to identify and analyze the volatility of rice food prices, predict rice food prices at the end of 2023, and determined Bank Indonesia’s policies related to rice food price volatility. This research is based on the concepts of volatility, food prices, and inflation. Quantitative methods such as ARCH and GARCH models are used to analyze the volatility of rice food prices. Secondary data is used in this study, and the research steps include data collection, data analysis and interpretation, and presentation of results to provide recommendations

Wheat yields in Kazakhstan can successfully be forecasted using a statistical crop model

Wheat production in Kazakhstan is fundamentally contributing to food security in Central Asia and beyond. It gained even more importance after recent spikes in global food prices in 2022. Therefore, timely and reliable estimates of Kazakh wheat production are important for food security planning and management. In this study, we developed a statistical weather-driven crop model that can successfully hindcast wheat yields at the oblast level up to two months before the harvest. The hindcast of wheat yields for 1993–2021 produces a median R2 of 0.69 for the full model run and R2 values of 0.60 and 0.37 for two levels of out-of-sample validations, respectively. Based on these yield estimates we provide a robust hindcast of the total wheat production for Kazakhstan with R2 values between 0.86 and 0.73. We forecast total wheat production in Kazakhstan for 2022 to be 12.4 million tonnes and the average yield to be 0.96 tonnes per hectare, which is 5 % above the production and yield of 2021 (assuming equal areas). The statistical model is run with publicly available weather and yield data and requires low computational power, making it easily replicable. The forecast model can be used as a replenishment to currently applied forecasting methods supporting countries in Central Asia to meet their food demand.

Towards the impact of economic policy uncertainty on food security: Introducing a comprehensive heterogeneous framework for assessment

In recent years, economic policy uncertainty (EPU) has become a topic of increasing interest among policymakers in advanced economies, and food security has become an increasingly essential but contentious term since the global food price spike. Based on a heterogeneous framework, this paper empirically investigates the impact of EPU on food security by utilizing panel data of 25 countries for the period of 1995–2019. This article combines the FAO's definition of food security and improves the food security evaluation system based on the existing data, further establishing secondary indicators of food supply, food access, food utilization, and food stability. The results show that the uncertainty of economic policy has a significant negative impact on food security; the results of adjustment effect show that both the fluctuation of grain price and the dependence on foreign trade enhance the inhibition of economic policy uncertainty on food security. Heterogeneity analysis shows that the uncertainty of economic policy has a greater negative impact on the food security of developed countries and food exporting countries. To ensure the world's food security, governmental authorities must strengthen policy support for grain production, concentrate capital investment in grain production, and ensure self-sufficiency in domestic grain production. At the same time, we should also build diversified grain import channels to ensure the stability and sustainability of import sources. In the future, governments should strengthen international cooperation on food security, build a community of human food security, and promote fair and free food trade.

Enhancing domestic consumption to deliver food security in a volatile world

Abstract Non-technical summary Global conflicts and the pandemic reveal the risks of food import reliance. In the UK, pandemic, Brexit, and Ukraine war caused food price spikes. To bolster food security, the UK needs to produce and consume more domestically, including nutrient-rich bivalve mollusks. Current mollusk exports hinder domestic food sources. Promoting domestic consumption through convenient, attractive products and taxing unhealthy processed foods can help. Reducing reliance on food trade is crucial amid global instability and climate change. The UK's mollusk export issues illustrate food security risks of excessive reliance on international trade. Technical summary Here we examine the critical issue of food security in the context of international volatility, emphasizing the risks associated with an excessive reliance on food trade. The UK's experience with disruptions caused by the pandemic, Brexit, and the Ukraine war, resulting in a significant surge in food prices, serves as a pertinent case study. The research underscores the potential benefits of increasing domestic food production and consumption to enhance resilience against global events. The UK's current production, export, and import statistics are analyzed, with a particular focus on the fish and seafood sector. The study highlights the bivalve mollusk industry, such as blue mussels, as an example of an underutilized domestic resource. Bivalve mollusks are rich in essential micronutrients, yet their consumption in the UK is low compared to other countries. We propose strategies to boost domestic demand, including incorporating bivalve meat into processed food products, utilizing advanced technologies to improve taste and texture, and government intervention through taxes on unhealthy processed foods to promote better nutritional profiles. In summary, the study emphasizes the need for greater self-sufficiency in food production to mitigate vulnerabilities resulting from an overreliance on food trade in the context of international conflicts and climate change. Social media summary Failure to effectively utilize domestic food resources and overreliance on trade threatens food security in an increasingly volatile world.

Moving climate seasonal forecasts information from useful to usable for early within-season predictions of durum wheat yield

Crop models fed by seasonal forecasts to deliver yield forecasts are becoming a valuable tool to tackle food production shocks and food price spikes triggered by climate change and extreme events. However, to what extent seasonal climate prediction can be coupled to crop models in an effective climate service to provide durum wheat yield forecasting at local, regional and national scales remains unknown. Within the H2020 MED-GOLD project, based on participatory action research and through a co-designing approach, a complete assessment of raw and bias-adjusted ECMWF-System5 seasonal forecasts data in feeding the Delphi model was performed and explicitly compared with a previous version of the Delphi model fed by a historical scenario, both benchmarked with yield observation data. The 5 and 3-months lead prediction accuracies of year-to-year variations in durum wheat yield in Italy for 31 crop years were explored and evaluated for which techniques to remove biases from input data to adopt and for which areas they performed better. The raw seasonal forecast (BC0) showed better yield forecasting correlation than the historical scenarios (0.42 vs 0.17) in southern Italy, but not better accuracy (53 % for both), while a first bias-adjusted seasonal forecast (BC1) had again a positive effect in terms of correlation (r = 0.43) especially in southern Italy and generally in terms of accuracy (59 %). Finally, by the implementation of a second bias-adjusted seasonal forecast (BC2) the best yield prediction system was reached, especially for the areas of central and southern Italy with a total accuracy of 62 % and r = 0.52.

Effects of Covid-19 Induced Spike in Food Prices on Urban Households’ Food Security in Northwest, Nigeria

The purpose of the study is to assess the effects of COVID-19 induced spike in food prices on urban households’ food security status in Northwest, Nigeria. Primary data through structured questionnaires were collected for the study. A multistage random sampling resulted into sample size of 240 urban households (samples). Primary data was used for the study. The results of variables used for the fixed effect regression shows that the mean price was ₦200, average household size was 7 persons per household, the average age and education was 45 and 10 years, respectively. The results of price trend before and during COVID-19 pandemic shows significant differences in all the four (4) cereal crops investigated. The result of the food security levels of households reveals that majority of the households (95%) were food secure before the outbreak of COVID-19 while the food secure households dropped to78% during COVID-19. The fixed-effects regression shows that the coefficients of price (1.05), household size (0.02), COVID-19 loan (-0.134e-7) and household income (0.015) were found to have statistically significant effects on food security status of households. The findings from this study will help guide governments at various levels in Nigeria in policy formulation towards ameliorating the sufferings of households in the study area. In addition, NGOs and other concerned local and international organisations can rely on this study as a guide for distributing COVID-19 relief find and further research.

Africa’s Food Security under the Shadow of the Russia-Ukraine Conflict

The Russian invasion of Ukraine in February 2022 has emerged as an exogenous shock to global food supply chains, which foreshadows worrying impacts on Africa’s food security and nutrition, and threaten to derail national and global efforts to end hunger and poverty and to achieve sustainable development goals on the continent. This article provides an early assessment of the implications of the invasion for Africa’s food supply chains and food security. Two particularly aggravating factors, which explain the current and likely future impact of the invasion on Africa’s food security are discussed: the timing of the invasion and the two parties involved in the conflict. The article underlines four major channels by which the invasion disrupts African food supply chains: energy markets and shipping routes, availability and prices of agricultural production inputs, domestic food price inflation, and trade sanctions and other financial measures. In addition, the article considers the risk of social and political unrest that disruption to food supply chains and spikes in domestic food prices may inflame. Finally, the paper briefly discusses options for short- and long-term responses by African governments and their development partners to mitigate the repercussions of the conflict on food supply chains, boost food and nutrition security, and build resilience of Africa’s food systems.

Food and Nutrition Policies of African Countries

The food crisis that is currently being faced by the world is very vulnerable to the survival of mankind. A food crisis usually begins with a shock to either supply or demand for food and often involves a sudden spike in food prices. Food security is a flexible concept that is reflected in many attempts at every definition used in research and policy. Empowerment of farmers in the African agricultural sector is the key to realizing African food security. The strategy of privatizing agricultural inputs by prohibiting the circulation of traditional seeds indirectly forces small farmers to buy private agricultural inputs

Nijerya'da gıda savunması ve ekonomik çeşitlendirme için darı üretiminin potansiyellerinden yararlanmak

Aims: Millet has the potential to become important components of intensive agriculture especially in Nigeria, hence the need to explore its food security and economic diversification potentials. Methods and Results: Time series data that spanned from 1961 to 2018 sourced from FAO database, covering production, area and yield were used to examine the food security trend of millet production in Nigeria. The collected data were analyzed using both descriptive and inferential statistics. The finding showed poor performance in the production of millet as growth was driven by area other than productivity. It was observed that price volatility triggered high fluctuation in area and yield, thus causing high instability in the production of millet. In addition, production risk and uncertainty were the major sources of production variability between the regime shifts. It was observed that surge in the average production level between regime shifts owed majorly to area expansion. The empirical evidence showed that the farmers decision on current acreage allocation for millet was governed by both institutional and non-institution factors. Furthermore, the forecast showed that the country will be faced with millet food insecurity to battle with; as critical reliance on millet importation will expose the country to risks from global food price spikes and shortages; and geopolitical and environmental threats. Conclusions: Thus, it can be inferred that the growth performance of millet production is not favorable. In lieu, the study recommends the need for long-term domestic self-sufficiency in millet production capable of feeding the country’s population as a key strategic food goal. Significance and Impact of the Study: Therefore, the outcome of this research will serve as leverage/ leeway for policy makers towards addressing the challenges of millet production for food security, stimulating livestock production-animal feed and foreign earning viz. exportation to the abundant arid regions in the sub-Saharan Africa.

Smallholder Farmers’ Challenges of Coping with COVID-19 Containments: Insights from two food regions in Indonesia

The COVID-19 pandemic has forced governments around the world to impose containment measures to prevent the rapid spread of the corona virus. The Indonesian government implemented “large-scale social restrictions,” which have impacted farming and farmers’ food security. Farmers are both producers and consumers of food and, therefore, have been facing new challenges due to transport restrictions, price spikes for inputs, price drops for their produce, or conditions which aggravated cooperation, such as social distancing. This study aims at analysing the challenges of the containments from a smallholder farmer perspective and examining farmers’ coping potential. A digital survey with 323 farmers has been designed as comparative observational research in Toraja, South Sulawesi, and selected regions of Java. The Bonferroni Multiple Comparison Test was used to test for significance regarding socio-economic factors and space. A logistic regression model extracted determinants for crisis coping. Results reveal, that female farmers worry more about COVID-19 outbreak compared to men at a significant level. In contrast, male farmers, particularly in Java, are more concerned about social restrictions due to limited mobility. Food price spikes were reported in both regions, with sharp increases for fish, fruits, and vegetables in Java, for staples in Toraja, and for meat and sugar in both regions. Food groups, that trade through agents and brokers or are transported longer distances were affected most due to their complex and long supply chains that were disrupted during the restrictions. In Java, farmers face multiple shocks, of which climate change was reported even more often than the pandemic related shocks. Not being able to help each other on the farm due to social distancing is a significant concern of farmers in Toraja. As a result of food market disturbances, farmers began to grow and eat more vegetables and fruits. In conclusion, food security for farmers slightly decreased due to affordability, and market disruptions already point to long-term income losses. The study team recommends to promote smallholders’ healthy food production, value addition and direct end-consumer linkages to build back better their livelihoods post-COVID-19.

Unlearned lessons of food price spikes

The article substantiates the author’s hypothesis of the fundamental reasons for periodic «ups» in prices for essential food products, including the most recent price jump in the second half of 2020. Both the official assessments of the causes of recurring food price surges and the measures taken by the executive branch to stop and prevent them are subjected to critical analysis. Conclusions and fundamental proposals are formulated aimed at eradicating the systemic causes of price volatility in the domestic food market.

Food Prices, Ethics and Forms of Speculation

This paper examines the role of speculative motives in the determination of commodity prices and specifically food related commodity prices. The motivation for this study is the considerable flow of funds into commodities, the widespread view that the process of financialization has led to greater levels of speculation and that speculation is the primary cause of regular spikes in food prices since the turn of the century. We consider two forms of short-term trading, a biasing influence (Manipulators) and a correcting influence (Speculators), relative to the fundamental price. While both forms of short-term trading are relevant, they are small in terms of their influence on overall prices. We do however find some evidence of an increased role being played by Manipulators during the period most associated with financialization.

Cointegration and spatial price transmission among rice markets in Tanzania: implications for price stabilisation policies

ABSTRACT In an effort to increase agricultural production, promote regional specialization and stabilize domestic food prices, the Tanzanian government has implemented several market-enhancing policies. The success of these measures depends, among other factors, on the cointegration and degree of price transmission across spatial markets. This study uses the vector autoregressive procedure of the Toda-Yamamoto causality test, dynamic ordinary least squares cointegration tests, and the asymmetric error correction model to examine the performance of Tanzania's domestic wholesale rice markets (lead-lag price relationship and long-run price adjustment process) during the post-agricultural market liberalization period. In response to changes in the marketing-enhancing policies during the investigation period, the presence of multiple structural breaks in the long-run equation is allowed. The results show that the Dar es Salaam market influences prices in all the rice markets examined, thus acting as a price leader. Furthermore, the price adjustment process results demonstrated the absence of asymmetric price adjustment between the central and regional wholesale rice markets, suggesting improved integration and efficiency of inter-regional rice markets. On the other hand, a central market's presence implies that interventions aimed at the central market can buffer regional markets to withstand adverse price shocks caused by food price spikes and volatility.

Agricultural price transmission across space and time: The case of cowpea and yam markets in Nigeria

The transmission of price changes to markets has attracted renewed interest since the international food price spikes of 2007 to 2011. In response to this, this paper investigates the long-run behaviour of Nigerian cowpeas and yam tuber retail prices across space and time from 2000 to 2015. We employed the augmented Dickey-Fuller unit root test, the Johansen co-integration test, the Granger causality test, the vector error-correction model (VECM) and variance decomposition analysis. The Johansen co-integration test confirmed the presence of a long-run relationship across the markets, while the VECM revealed that the speed of adjustment to equilibrium after price shocks in the yam and cowpea markets varied across space (market) and period (time), with the food crisis in the period pre-2007 to 2011 fastest and the food crisis in the period 2007 to 2011 slowest. We are of the opinion that the presence of a long-run relationship in Nigerian cowpea and yam markets is a call for participants to explore opportunities for gainful trade.

Climate change as a driver of food insecurity in the 2007 Lesotho-South Africa drought

Climate-induced food production shocks, like droughts, can cause food shortages and price spikes, leading to food insecurity. In 2007, a synchronous crop failure in Lesotho and South Africa—Lesotho’s sole trading partner—led to a period of severe food insecurity in Lesotho. Here, we use extreme event attribution to assess the role of climate change in exacerbating this drought, going on to evaluate sensitivity of synchronous crop failures to climate change and its implications for food security in Lesotho. Climate change was found to be a critical driver that led to the 2007 crisis in Lesotho, aggravating an ongoing decline in food production in the country. We show how a fragile agricultural system in combination with a large trade-dependency on a climatically connected trading partner can lead to a nonlinear response to climate change, which is essential information for building a climate-resilient food-supply system now and in the future.

EFFECT OF ADAPTATION PRACTICES TO CLIMATE CHANGE ON AGRICULTURAL PRODUCTION BY FARMING HOUSEHOLD. A CRITICAL LITERATURE REVIEW

Purpose: Climate change can disrupt food availability, reduce access to food, and affect food quality. Projected increases in temperatures, changes in precipitation patterns, changes in extreme weather events, and reductions in water availability may all result in reduced agricultural productivity. Increases in the frequency and severity extreme weather events can also interrupt food delivery, and resulting spikes in food prices after extreme events are expected to be more frequent in the future. Increasing temperatures can contribute to spoilage and contamination. The general objective of the study was to establish the effect of Adaptation practices to climate change and its impact on agricultural production by farming household. 
 Methodology: The paper used a desk study review methodology where relevant empirical literature was reviewed to identify main themes and to extract knowledge gaps.
 Findings: The study found out the locals households prefer multiple adaptation strategies to counter the effects of climate variability and change. The current local adaptation strategies include crop, diversification, shifting planting dates, off farm jobs and diversifying from farm to non – farm activities. However majority of the respondents employ crop diversification as the main adaptation strategy. For the locals’ crop diversification does, to an extent, guarantees good harvests although there are years in which farmers report total crop losses
 Recommendations: The study recommends that policy efforts should be directed at enforcing adaptation measures of climate change in order to boost agricultural production

Grain export restrictions during COVID-19 risk food insecurity in many low- and middle-income countries.

Global food security is threatened by the effects of COVID-19 on international agricultural supply chains and locusts destroying crops and livelihoods in the Horn of Africa and South Asia. We quantify the possible impacts on global supplies and prices of wheat, rice and maize. We show that local production declines have moderate impacts on global prices and supply-but trade restrictions and precautionary purchases by a few key actors could create global food price spikes and severe local food shortages.

Towards food supply chain resilience to environmental shocks.

Environmental variability and shock events can be propagated or attenuated along food supply chains by various economic, political and infrastructural factors. Understanding these processes is central to reducing risks associated with periodic food shortages, price spikes and reductions in food quality. Here we perform a scoping review of the literature to examine entry points for environmental variability along the food supply chain, the evidence of propagation or attenuation of this variability, and the food items and types of shock that have been studied. We find that research on food supply shocks has primarily focused on maize, rice and wheat, on agricultural production and on extreme rainfall and temperatures-indicating the need to expand research into the full food basket, diverse sources of environmental variability and the links connecting food production to consumption and nutrition. Insights from this new knowledge can inform key responses-at the level of an individual (for example, substituting foods), a company (for example, switching sources) or a government (for example, strategic reserves)-for coping with disruptions.

Food Prices, Ethics and Forms of Speculation

This paper examines the role of speculative motives in the deter- mination of commodity prices and specifically food related commodity prices. The motivation for this study is the considerable flow of funds into commodities, the widespread view that the process of financial- ization has led to greater levels of speculation and that speculation is the primary cause of regular spikes in food prices since the turn of the century. We consider two forms of speculation, a biasing influence (manipulation) and a correcting influence (speculators), relative to the fundamental price. While both forms of speculation are relevant, they are small in terms of their influence on overall prices. We do however find some evidence of an increased role being player by manipulators during the period most associated with financialization.

No perfect storm for crop yield failure in Germany

Large-scale crop yield failures are increasingly associated with food price spikes and food insecurity and are a large source of income risk for farmers. While the evidence linking extreme weather to yield failures is clear, consensus on the broader set of weather drivers and conditions responsible for recent yield failures is lacking. We investigate this for the case of four major crops in Germany over the past 20 years using a combination of machine learning and process-based modelling. Our results confirm that years associated with widespread yield failures across crops were generally associated with severe drought, such as in 2018 and to a lesser extent 2003. However, for years with more localized yield failures and large differences in spatial patterns of yield failures between crops, no single driver or combination of drivers was identified. Relatively large residuals of unexplained variation likely indicate the importance of non-weather related factors, such as management (pest, weed and nutrient management and possible interactions with weather) explaining yield failures. Models to inform adaptation planning at farm, market or policy levels are here suggested to require consideration of cumulative resource capture and use, as well as effects of extreme events, the latter largely missing in process-based models. However, increasingly novel combinations of weather events under climate change may limit the extent to which data driven methods can replace process-based models in risk assessments.