World Bank2014-07-182014-07-182008-12https://hdl.handle.net/10986/18909The dramatic increases in world food and fuel prices during 2007 and early 2008 may set back Mozambique's considerable advances in poverty reduction during the past decade. This study assesses the impact of higher fuel and food prices at both household and macroeconomic levels, and also considers policy options to mitigate some of the negative impacts of higher prices. Rising world prices certainly represents a negative terms-of-trade shock for Mozambique, since the country imports almost all of its fuel and is a net importer of food. The report is structured in six sections. Section two presents information on the extent of international food and fuel price increases and their transmission to local markets in Mozambique. Section three presents household-level analysis focused on the first order impact of the food price increases. Section four complements previous sections by examining the impact of higher food and fuel prices within a general equilibrium framework. Section five discusses the likely impact of alternative policy options in the short and long term. Section six summarizes and concludes.en-USCC BY 3.0 IGOABSOLUTE POVERTYADVERSE EFFECTSAGRICULTURAL COMMODITIESAGRICULTURAL LANDAGRICULTURAL OUTPUTAGRICULTURAL PRICESAGRICULTURAL PRODUCTIONAGRICULTURAL PRODUCTIVITYAGRICULTURAL PRODUCTSAGRICULTURAL SECTORAGRICULTURAL TECHNOLOGYAGRICULTURAL WAGESAGRICULTUREARBITRAGEBASE YEARBORDER PRICECASH TRANSFER PROGRAMSCASH TRANSFERSCASSAVACEREAL CROPSCEREALSCIVIL WARCOMMERCECOMMERCIALIZATIONCOMMODITIESCOMMODITYCOMMODITY PRICECOMMODITY PRICESCOMPETITIVE MARKETCONSTANT RETURNS TO SCALECONSUMER PRICECONSUMER PRICE INDEXCONSUMER PRICESCONSUMERSCONSUMPTION EXPENDITURESCONSUMPTION LEVELSCOOKINGCOST OF LIVINGCROP PRODUCTIONCROSS PRICEDEVELOPMENT ECONOMICSDISTRIBUTION OF BENEFITSDOMESTIC MARKETDOMESTIC MARKETSDOMESTIC PRICEDOMESTIC PRICESECONOMIC SECTORSECONOMIC STRUCTUREELASTICITYELASTICITY OF SUBSTITUTIONENERGY PRICESEQUILIBRIUMEXCHANGE RATEEXCHANGE RATE FLUCTUATIONSEXCHANGE RATE MOVEMENTSEXCHANGE RATESEXPENDITUREEXPENDITURESEXPORT SECTORSFACTOR PRICEFACTOR PRICESFACTORS OF PRODUCTIONFARM PRODUCTIVITYFARMERSFINANCIAL CRISISFINANCIAL FLOWSFINANCIAL MANAGEMENTFISCAL DEFICITFIXED COSTSFLOURFOOD BASKETFOOD BUYERSFOOD CONSUMERSFOOD CONSUMPTIONFOOD EXPENDITURESFOOD EXPORTSFOOD GRAINSFOOD IMPORTSFOOD ITEMSFOOD PRICEFOOD PRICE SUBSIDIESFOOD PRICESFOOD PRODUCTIONFOOD SALESFOOD STAPLESFOOD SUBSIDIESFOREIGN CURRENCYFOREIGN EXCHANGEFOREIGN MARKETSGDPGENERAL EQUILIBRIUM ANALYSISGNPGRAINSGROSS DOMESTIC PRODUCTGROSS NATIONAL PRODUCTGROUNDNUTSHOUSEHOLD CONSUMPTIONHOUSEHOLD INCOMEHOUSEHOLD SURVEYHOUSEHOLD WELFAREHYDROCARBONSIFPRIIMPACT ON POVERTYIMPERFECT COMPETITIONINCOMEINCOME DISTRIBUTIONINCOME GROUPINCOME GROUPSINCOME LEVELSINCOME QUINTILEINCOMESINFLATIONINSURANCEINTERNATIONAL RESERVESINTERNATIONAL TRADEINVESTMENT CLIMATELABOR MARKETSLAND OWNERSHIPLANDHOLDINGSLOCAL CURRENCYLOW-INCOME COUNTRIESMACROECONOMIC ADJUSTMENTSMACROECONOMIC LEVELSMAIZEMARGINAL COSTMARGINAL REVENUEMARKET ECONOMYMARKET INFRASTRUCTUREMARKET PRICEMARKET PRICESMARKET RETURNSMARKET SHAREMARKETED FOODSMARKETINGMEATMEATSMILLING INDUSTRYNATIONAL INCOMENATIONAL POVERTYPARTIAL EQUILIBRIUM ANALYSISPENSIONPENSION SYSTEMPETROLEUM PRODUCTSPOORPOOR COUNTRIESPOOR HOUSEHOLDSPOOR PERSONSPOVERTY IMPACTPOVERTY LEVELSPOVERTY LINEPOVERTY MEASURESPOVERTY RATESPOVERTY REDUCTIONPOVERTY REDUCTION STRATEGYPRICE CHANGEPRICE CHANGESPRICE DISCRIMINATIONPRICE INCREASEPRICE INCREASESPRICE LEVELSPRICE MOVEMENTSPRICE SUBSIDYPRICE TRENDSPRICE VOLATILITYPRICING POLICIESPRIVATE INVESTMENTPROCESSED FOODSPRODUCTION STRUCTUREPROFIT MAXIMIZATIONPUBLIC POLICYPUBLIC SAVINGSPUBLIC WORKSPULSESPURCHASINGPURCHASING POWERRAPID GROWTHRATE OF GROWTHREAL INCOMERETAILRETAIL MARKETSRETAIL PRICERETAIL PRICESRICEROOT CROPSRURALRURAL AREASRURAL ECONOMYRURAL FARMRURAL HOUSEHOLDRURAL HOUSEHOLDSRURAL INCOMESRURAL LABORRURAL POORRURAL POVERTYRURAL WAGESSAFETY NETSAFETY NETSSALESALESSAVINGSSMALL COUNTRYSOCIAL PROTECTIONSOCIAL SAFETY NETSSOCIAL SECURITYSPREADSTAPLE FOODSSTRUCTURAL CHANGESUBSTITUTESSUBSTITUTIONSUGARSURPLUSTARGETED SOCIAL SAFETY NETSTAXTAX RATESTAXATIONTECHNICAL ASSISTANCETOTAL SALESTRADE BARRIERSTRADE LIBERALIZATIONTRADE POLICIESTRADE POLICYTRADE TAXESTRANSACTION COSTTRANSACTION COSTSTROUGHVALUE ADDEDWAGE RATESWAGESWEALTHWHEATWHEAT FLOURWHOLESALERS10.1596/18909