Rice Trade and Price Volatility: Implications on ASEAN and Global Food Security

Date: September 2013
Type: Papers and Briefs
Subject:
Series: Economics Working Papers
ISSN: 1655-5252 (print)
Author: Clarete, Ramon; Adriano, Lourdes; Esteban, Amelia

Description

This paper highlights the thinness of rice trade relative to wheat and maize, and the contrasting price volatility and tradability relations for wheat and maize, which display a positive correlation, and for rice, which show an inverse relation. The paper focuses on Southeast Asia, which hosts the world’s biggest rice exporters and rice importers. Using the Granger causality tests to determine correlation, the analysis concludes that very low global trading activity in rice that tends to self-perpetuate its dampening effect on trade does not cause extreme rice price volatility in the region, but the other way around. Rice-importing countries appear to resort to self-sufficiency measures as insurance to compensate for the high risks of unreliable rice supply and unaffordable rice prices. What would it take for countries to regain their confidence in external rice trade? The Association of Southeast Asian Nations Integrated Food Security Program provides a menu of policies for reducing and managing the chances of excessive rice price volatility.

See also:

Food Security in Asia and the Pacific
Bilateral Trade and Food Security
Poverty and Food Security in India
Examining the Determinants of Food Prices in Developing Asia
Safety Nets and Food Programs in Asia: A Comparative Perspective
International Trade and Risk Sharing in the Global Rice Market: The Impact of Foreign and Domestic Supply Shocks
International Transmission of Food Prices and Volatilities: A Panel Analysis
Food Prices and Population Health in Developing Countries: An Investigation of the Effects of the Food Crisis Using a Panel Analysis
The Transformation of Rice Value Chains in Bangladesh and India: Implications for Food Security
Overcoming Critical Constraints to Sustaining Productivity Growth in Key Commodities of Asia and the Pacific

Contents

  • Abstract
  • Introduction
  • Profile of Output and Trade in Selected Cereals
  • Tradability and Price Volatility of Cereals
  • Self-Perpetuating Cycle: Thin Trade in Rice
  • Giving Trade a Chance through Regional Actions
  • Conclusion
  • References