The Impact of Trade Policies on Spiraling Prices in International Agricultural Commodity Markets

Agnes Ghibutiu

Revista de Economie Mondiala / The Journal of Global Economics, 2011, vol. 3, issue 3

Abstract: Since the mid-2000s food prices have been on an upward trend. In the first months of 2011, agricultural commodity prices reached an all-time high, fuelling fears about the imminent outbreak of a new food crisis, similar to the 1973/74 and 2006/08 ones. Behind concerns about increased price levels and volatility in international agricultural commodity markets lie concerns about food security. Hence, the international community is now under pressure to urgently find solutions for tempering strong upward fluctuations in prices for many major food commodities. Trade policy changes are increasingly discussed as a major contributing factor to food price surges. This paper addresses some issues related to the recurrent global food crises from the perspective of trade policy, specifically export restrictions. After a brief review of the fundamental drivers of the upward trend in real food prices (rising global population and income, climate change, high oil prices, increasing cereal use for biofuel production, and financial speculation), it examines the upsurge in agricultural export restrictions over the recent years. Relying on WTO's trade policy monitoring exercise, it highlights typology, motivations and effects of the newly introduced export restrictions, and finds that a major factor behind their recent proliferation is the lack of effective and binding multilateral rules concerning these trade policy instruments. The paper argues that strenghtening and improving WTO's rules and disciplines is essential for mitigating increased price pressure and volatility as well as the associated food security risks. While the issue of export restrictions is currently the topic of discussions under the Doha Round, trade negotiations are in impasse since 2008. Hence, urgent and successful conclusion of the round would be an essential step. In the meanwhile, a closer regular monitoring of all forms of export restrictions would help to provide at least more transparency in this area. A collective agreement to limit the extent of restrictive trade measure would be also useful. Finally, a more systematic and internationally coordinated approach would be needed to improve commodity governance and contend with spiralling food prices and volatility.

Keywords: food prices; food price volatiliy; agricultural trade; agricultural trade policy; WTO; Doha Round (search for similar items in EconPapers)
JEL-codes: F13 O13 Q17 Q18 (search for similar items in EconPapers)
Date: 2011
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.iem.ro/rem/index.php/REM/article/view/66/52 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iem:journl:v:3:y:2011:i:3:id:2822000008752027

Access Statistics for this article

Revista de Economie Mondiala / The Journal of Global Economics is currently edited by Simona Moagar Poladian, PhD

More articles in Revista de Economie Mondiala / The Journal of Global Economics from Institute for World Economy, Romanian Academy Contact information at EDIRC.
Bibliographic data for series maintained by Ionela Baltatescu ( this e-mail address is bad, please contact ).