Publication:
Long-Term Drivers of Food Prices

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dc.contributor.authorDennis, Allen
dc.contributor.authorBaffes, John
dc.date.accessioned2013-09-04T18:32:32Z
dc.date.available2013-09-04T18:32:32Z
dc.date.issued2013-05
dc.description.abstractIt is becoming increasingly apparent that the post-2004, across-the-board, commodity price increases, which initially appeared to be a spike similar to the ones experienced during the early 1950s (Korean War) and the 1970s (oil crises), have a more permanent character. From 1997-2004 to 2005-12 nominal prices of energy, fertilizers, and precious metals tripled, metal prices went up by more than 150 percent, and most food prices doubled. Such price increases, especially in food commodities, not only fueled a debate on their key causes, but also alarmed government officials, leading to calls for coordinated policy actions. This paper examines the relative contribution of various sector and macroeconomic drivers to price changes of five food commodities (maize, wheat, rice, soybeans, and palm oil) by applying a reduced-form econometric model on 1960-2012 annual data. The drivers include stock-to-use ratios, crude oil and manufacturing prices, the United States dollar exchange rate, interest rate, and income. Based on long-run elasticity estimates (approximately -0.25 for the stock-to-use ratios, 0.25 for the oil price, -1.25 for the exchange rate, and much less for others), the paper estimates the contribution of these drivers to food price increases from 1997-2004 to 2005-12. It concludes that most of the price increases are accounted for by crude oil prices (more than 50 percent), followed by stock-to-use ratios and exchange rate movements, which are estimated at about 15 percent each. Crude oil prices mattered most during the recent boom period because they experienced the largest increase.en
dc.identifierhttp://documents.worldbank.org/curated/en/2013/05/17739333/long-term-drivers-food-prices
dc.identifier.doi10.1596/1813-9450-6455
dc.identifier.urihttps://hdl.handle.net/10986/15594
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No. 6455
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectAGGREGATE DEMAND
dc.subjectAGRICULTURAL COMMODITIES
dc.subjectAGRICULTURAL DEVELOPMENT
dc.subjectAGRICULTURAL ECONOMICS
dc.subjectAGRICULTURAL PRICES
dc.subjectAGRICULTURE
dc.subjectANIMAL PRODUCTS
dc.subjectAPPROACH
dc.subjectAVERAGE PRICE
dc.subjectBIOMASS
dc.subjectCENTRAL BANKS
dc.subjectCEREAL PRICES
dc.subjectCEREALS
dc.subjectCLIMATE
dc.subjectCLIMATE CHANGE
dc.subjectCOCOA
dc.subjectCOMMODITIES
dc.subjectCOMMODITY
dc.subjectCOMMODITY MARKETS
dc.subjectCOMMODITY PRICE
dc.subjectCOMMODITY PRICES
dc.subjectCONSUMPTION OF COMMODITIES
dc.subjectCRUDE OIL
dc.subjectCRUDE OIL CONSUMPTION
dc.subjectCRUDE OIL PRICE
dc.subjectCURRENCY
dc.subjectDEBT
dc.subjectDEMAND FOR FOOD
dc.subjectDEMAND GROWTH
dc.subjectDEVELOPING COUNTRY
dc.subjectDEVELOPMENT ECONOMICS
dc.subjectECONOMIC ACTIVITY
dc.subjectECONOMIC ANALYSIS
dc.subjectECONOMIC GROWTH
dc.subjectEDIBLE OILS
dc.subjectEFFICIENCY IMPROVEMENT
dc.subjectEMERGING ECONOMIES
dc.subjectENERGY DEMAND
dc.subjectENERGY ECONOMICS
dc.subjectENERGY MARKETS
dc.subjectENERGY POLICY
dc.subjectENERGY PRICE
dc.subjectENERGY PRICES
dc.subjectENERGY SECURITY
dc.subjectEQUILIBRIUM PRICE
dc.subjectETHANOL
dc.subjectETHANOL PRICES
dc.subjectEXCHANGE RATE
dc.subjectEXCHANGE RATE MOVEMENT
dc.subjectEXCHANGE RATE MOVEMENTS
dc.subjectEXCHANGE RATES
dc.subjectEXOGENOUS SHOCK
dc.subjectEXPORT MARKET
dc.subjectFEDERAL RESERVE
dc.subjectFINANCIAL INSTITUTIONS
dc.subjectFINANCING FACILITY
dc.subjectFISCAL POLICY
dc.subjectFOOD CONSUMPTION
dc.subjectFOOD POLICY
dc.subjectFOOD POLICY RESEARCH
dc.subjectFOOD PRICE
dc.subjectFOOD PRICE INFLATION
dc.subjectFOOD PRICES
dc.subjectFOOD RESERVES
dc.subjectFOOD SECURITY
dc.subjectFUEL
dc.subjectFUEL CONSUMPTION
dc.subjectFUTURES
dc.subjectGENERAL EQUILIBRIUM MODEL
dc.subjectGLOBAL ECONOMIC PROSPECTS
dc.subjectGLOBAL ECONOMY
dc.subjectGLOBAL EXPORTS
dc.subjectGLOBAL FOOD SECURITY
dc.subjectGRAIN RESERVES
dc.subjectGRAINS
dc.subjectGROSS DOMESTIC PRODUCT
dc.subjectGROWTH RATES
dc.subjectIFPRI
dc.subjectIMPORTS
dc.subjectINCOME
dc.subjectINCOMES
dc.subjectINFLATION
dc.subjectINFLATIONARY PRESSURES
dc.subjectINFORMATION SYSTEM
dc.subjectINPUT PRICES
dc.subjectINSURANCE
dc.subjectINSURANCE MECHANISMS
dc.subjectINTEREST RATE
dc.subjectINTEREST RATES
dc.subjectINTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
dc.subjectINVENTORY
dc.subjectMAIZE
dc.subjectMARKET CONCENTRATION
dc.subjectMARKET FAILURE
dc.subjectMARKETING
dc.subjectMEAL
dc.subjectMIDDLE-INCOME COUNTRIES
dc.subjectMONETARY FUND
dc.subjectMONETARY POLICIES
dc.subjectOIL CONSUMPTION
dc.subjectOIL CRISES
dc.subjectOIL PRICE
dc.subjectOIL PRICES
dc.subjectOIL SECTOR
dc.subjectOIL SPILLS
dc.subjectPADDY
dc.subjectPALM OIL
dc.subjectPARTICULAR COUNTRY
dc.subjectPOLICY ANALYSIS
dc.subjectPOLICY IMPLICATIONS
dc.subjectPOLICY MAKERS
dc.subjectPORTFOLIOS
dc.subjectPOWER PARITY
dc.subjectPRICE CHANGES
dc.subjectPRICE ELASTICITY
dc.subjectPRICE FLUCTUATIONS
dc.subjectPRICE INCREASES
dc.subjectPRICE INDEX
dc.subjectPRICE INDEXES
dc.subjectPRICE INFLATION
dc.subjectPRICE MOVEMENTS
dc.subjectPRICE OF OIL
dc.subjectPRICE STABILIZATION
dc.subjectPRICE TRENDS
dc.subjectPRICE VOLATILITY
dc.subjectPRICES OF ENERGY
dc.subjectPRODUCER PRICES
dc.subjectPROTEIN
dc.subjectPURCHASING
dc.subjectPURCHASING POWER
dc.subjectRATE OF RETURN
dc.subjectRAW MATERIALS
dc.subjectRELATIVE PRICE
dc.subjectRESERVE BANK
dc.subjectRESOURCE ECONOMICS
dc.subjectRICE MARKETING
dc.subjectSOURCE OF ENERGY
dc.subjectSOYBEAN
dc.subjectSOYBEAN OIL
dc.subjectSOYBEANS
dc.subjectSTOCKS
dc.subjectSUBSTITUTES
dc.subjectSUGARCANE
dc.subjectSUPPLY SCHEDULE
dc.subjectSUPPLY SCHEDULES
dc.subjectSUPPLY SHOCKS
dc.subjectSUPPLY SIDE
dc.subjectTOTAL CONSUMPTION
dc.subjectTREASURY
dc.subjectTREASURY BILL
dc.subjectVOLATILE INTERNATIONAL
dc.subjectWHEAT
dc.subjectWORLD DEVELOPMENT INDICATORS
dc.subjectWORLD TRADE
dc.titleLong-Term Drivers of Food Pricesen
dspace.entity.typePublication
okr.crosscuttingsolutionareaJobs
okr.crosscuttingsolutionareaClimate Change
okr.crossref.titleLong-Term Drivers of Food Prices
okr.date.disclosure2013-05-01
okr.date.doiregistration2025-04-10T12:09:06.389915Z
okr.doctypePublications & Research::Policy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/2013/05/17739333/long-term-drivers-food-prices
okr.globalpracticeMacroeconomics and Fiscal Management
okr.globalpracticeFinance and Markets
okr.globalpracticeTrade and Competitiveness
okr.globalpracticeEnergy and Extractives
okr.guid832971468150565490
okr.identifier.doi10.1596/1813-9450-6455
okr.identifier.externaldocumentum000158349_20130521131725
okr.identifier.internaldocumentum17739333
okr.identifier.reportWPS6455
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2013/05/21/000158349_20130521131725/Rendered/PDF/WPS6455.pdfen
okr.topicFood and Beverage Industry
okr.topicMacroeconomics and Economic Growth::Markets and Market Access
okr.topicPrivate Sector Development::Emerging Markets
okr.topicMacroeconomics and Economic Growth::Climate Change Economics
okr.topicEnergy::Energy Production and Transportation
okr.topicIndustry
okr.unitDevelopment Research Group (DECRG)
okr.volume1 of 1
relation.isAuthorOfPublication18b25906-9cb0-519d-95a9-8bfd4c5a3666
relation.isAuthorOfPublication.latestForDiscovery18b25906-9cb0-519d-95a9-8bfd4c5a3666
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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