Working Papers
Department of Economics
Ca’ Foscari University of Venice
No. 23/WP/2010
ISSN 1827-3580
Long-term cereal price changes: how
important is the speculative element 1
M. Bruna Zolin
Università Ca’ Foscari di Venezia
Bernadette Andreosso-O’Callaghan
University of Limerick
First Draft: 20.07.2010
Abstract
T he o b ject iv e o f th i s art ic le is t o p r ov ide a n a na ly s is of t he re la ti o ns h i p
ex ist ing betwee n cereal pr ices and seve ra l varia b les suc h a s popu lation,
income, ex port s, the exc hange r ate, a nd s pecu la t io n, b y us i ng a lin ear
r e g r e s s io n a na ly s is. S p e c if ic e m p h a s is is placed on t he speculat ive
d ime ns i on . T he meth od o l ogy us ed he l ps u s ex pl ore t he f orms o f
re l at io ns h i ps be twe en t he d if fere nt v ar ia b les, a nd, mo re s pe ci f ica l ly, it
g i ves a n i n si g ht i nt o t he exte nt o f s peculation dur i ng the rece nt cr it ical
t ime per i od. Our r e s u lt s s ho w t ha t s pe c u la t io n ( d e f i ne d b y t he l on g
p o s it io n o f t r a d e r s ) ha s p layed a cr uc ia l role during t he pe riod J une 2001 –
Dece mbe r 20 0 9. Acc ord i ng to our a na lysis, speculation it is t he mo st
re le va nt i nde pe nden t var ia b le t hat a ffec ts cereal pr ices. Ex ports, in some
way s c onnected t o t he forme r variable, oc cupy sec o nd plac e, in term of
signific ance. However, the ir impact on cere a l pr ices is le ss r ele vant than
t ha t o f b i ofu e l pr odu c t io n . P op u l a t io n g r owt h d oe s n ot h a v e imp a c t in a
p o s it i ve way o n cere al pr ice s; it acts i n t he op po s ite d i rect io n due t o th e
c ha nge i n di et s, im pl yin g t h at po pu lat ion increases would t end to affec t
p r ima r i ly o t h e r a g r ic ultural mar ket s. Excessive vola t i li ty i n f o od pr ice s, a s
t ha t o bse rv ed in the l ast yea rs is a dr amat ic quest i on . Fr om a dem and p oin t
o f v ie w, c on s u m e r s i n d e ve lo p i ng c ou nt r ie s a nd vu l ne ra b le i n c o me gr ou ps
i n ot her c oun tr ie s (fa rmer s) ha ve t o b e pr otec ted. Mor e th an o ne po l icy o n
b o t h i nt e r n a t i on a l m a r k e t s a nd d om e s t ic marke ts have to be intr oduced so
as t o le sse n food/cere a l lowe r pr ice volat i lity.
K e y wo r ds cere a l pr ices, future market s and speculat ion, rene wable ener gy,
a gr ic u ltu ra l d e m and a nd s up p ly .
JEL Codes Q 11 , Q 1 8, Q 1 7, O 1 3, 0 5 2, 0 5 3, F 4 3
Address for correspondence:
Maria Bruna Zolin
Department of Economics
Ca’ Foscari University of Venice
Cannaregio 873, Fondamenta S.Giobbe
30121 Venezia - Italy
The authors would like to acknowledge the precious help provided by Elisa Guerra and Andrea Lucchetta in the
sourcing and elaboration of statistical data and to Domenico Sartore for his valuable comments on an earlier draft.
1
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2
1 . In t r o d u c ti o n
W here as du ri n g t he per io d s pa n ni ng o v e r t he y e a r s 1 97 4 - 2 00 5 , f o od p r ice s
on wor ld ma rke ts fe ll by thr ee-qua rte rs in re al te rms, the sudde n increa se
o f fo od pr ice s s i nce 200 5 seem s t o h a ve s tar ted a ne w er a o f ‘ agf l at ion ’.
A l th ou gh t he c h an gi ng fo od p atte rns i n l arge emer g in g ec on o mie s suc h a s
C h i na a nd In d ia a nd t he i nc re a sed l an d requ ir e me nt s fo r gr ow i n g n on - foo d
c r o ps a imed a t t he t ra nsp o rt se c t or in d e ve lo ped e c o no m i e s e x p la i n par t o f
t h is i nc r e a s e , t he s pe c u la t i on i n phy s ica l c omm od it ie s mar ket (s uc h as c or n,
c of fee, c oc oa a nd whe at) may al s o h a ve a r o le t o p lay. Th e d im i ni s hi n g
a rb it rage p ro s pect s by in v est or s i n th e cu rre ncy m ar kets, c om b ined w i th t he
cred it cr unch and t he housing c rash, have caused a flight to food and
e nergy c omm od it ies.
A c c o r d i ng
to
FAO
sources
(FAO,
2 0 0 9) ,
t he
f o od
p r ice
i nd e x
of
i n t e r na t i o nal l y t r a d e d ba s ic f ood c om m od it ies ( b a s e 1 0 0 i n 2 0 0 2 - 04 ) f e ll a
f u ll 3 5 pe r c e nt bet we e n t he p e a k i n J u ne 2 0 0 8, t o t he e nd o f A p r i l 20 0 9. I n
M ay 20 0 9, th e i ndex was 1 5 2. 70 perce nt h ig her t ha n t he 20 00 l eve l. Be cau se
o f t he i nterac t io n be twee n d ema nd a nd su pp ly, agr ic u ltur al p ric es te nd t o
b e v ol at i le an d t he act i v ity o f spec u la to rs c a n amp l i fy t he se fl uct uat i o ns.
A gr icu lt ura l p rod ucts co n s ist u su al ly of b as ic fo od , and t hey re pre sen t t he
m a i n c om pon e n t o f r u r a l i nc om e s a s w el l a s t he d ie t o f p o or s e g m e nt s o f
p o pu l a t io n s i n d e ve lo p i ng c o u n t r ies . T his m e a n s t h a t h ig h f o od p r ic e s h i t
p r ima r i ly p oo r c o ns u m e r s , a nd t h a t lo w agr icultur al pr ices hit poor far m e r s.
T he o b ject iv e o f t h is a rt ic le i s t here f ore to p r ov ide a n a na ly s is o f t he
re lat ionship ex ist i ng bet wee n cereal price s a nd se ver a l va ri a b les s uc h a s
populat ion, income, ex port s, t he exchange rate, a nd spe cu lati o n, by us i ng a
l i ne ar regre ss i o n a na ly s is (S ect io n 4). S pe c if ic e m p ha s i s w il l b e p la c e d o n
t he spe cu lati v e ( or ar bi tr age) d ime nsion in cereals marke ts ( Sect ion 3). T he
time period c o vers the years June 2 00 1 – D e c e m b e r 20 0 9 and the analy sis
e nc omp as ses four major c ommodit ies, name ly cor n, r ice, wheat and bar ley.
T he m e t h odo l o g y u s e d h e lp s u s e x pl o r e t he f or m s of r e lat io n s hi p s bet w e e n
t he d if fere nt var i ab le s, a nd, m ore sp ec if ica l ly, it g i ves an in s ig ht i nt o t he
exte nt o f sp ecu la ti o n du ri ng t hi s c ri ti ca l t ime per i od. T he a n aly s is w i l l
c on c l ud e w it h po l ic y rec omme nda t i o n s i n t he a re a of ag ric u ltur a l a nd
c ommod ity mar kets ( Sect ion 5). Before hand, a f e w i ns ig ht s i n t o t he m a i n
d e m a nd a nd s u p p ly e x p la na to ry f acto rs o f ag ricu lt ura l c omm od ity (ce rea l s)
pr ices will be scrut inized (Sect ion 2).
2 . Dem an d a n d s u pp ly d riv e rs
T he f act ors t ha t af fect th e pr ic in g of agr ic ul tur al c omm odi t ie s ( part ic ul ar ly
cere a ls) are c om pl ex; t hey are w id el y de ba ted an d a na ly sed. M a ny aut ho rs
3
c onclude that t he most import ant fact or of the rapid recent r ise in food
p r ic e s
is
the
lar g e
in c r e a s e
in
biofuel
pr odu c t i o n,
m a i n ly
in
t he
i n d u s t r ia l i ze d c ou nt r ies ( M itc he l l, 2 0 0 8; Kutas et al, 20 07 ; I F RI, 2 00 8 ;
M u l le r , 2 0 08 ) . O t h e r s i d e nt i f y s p e c ulation as a source of increasing
a g r ic u ltu r a l c om m od ity p r ic e s i n 2 00 7 - 2 0 08 ( R ob l e s et al 2 00 9 ; W a lp, 2 0 0 9;
T im m e r , 2 00 9 ; P a c e et al , 2 0 0 8) . A l t ho u g h t he r e la t ive imp o r t a nce of t he
d if fere nt exp l a nat ory var ia b le s va ry acr o ss s tudi es, the se an a lys es te nd t o
a gree wi th th e b ro ad c on c lus i o n th at be hi nd t he ra p id inc rea se (a nd t he n
decre ase ) i n f o od pr ice s, t here are sev era l fa ct ors at p lay.
G r a p h 1 s ho w s t he r e c e nt pr ice h ik e ( 2 0 0 7- 2 00 8 ) i n t he c a s e of t he f o u r
cr ops under re view, name ly bar ley, corn, r ice and wheat. One should note
t ha t a c e rta in t r ade -o ff e x is t s bet we e n t he d if fere nt c ro p s, im p ly in g t hat a n
increased demand for one spec ific cere a l (c or n, as exam p le) may h ave a n
i n di rect i mpac t o n t he pr ice o f ot her cr op s suc h as r ice. W he n fo od p ri ce s
i n c r e a s e d i n 2 0 0 7 - 2 0 08 , t he r o le o f s p e c u la t i o n in t he s e m a r k e t s wa s a lm o s t
e nt ire ly i gno red, w h i le t he pr oduc ti o n o f b io f u e l s wa s c on s ide r e d a s t he
main responsible fact or for t hese shar p increases. T he decre ase in food
p r ic e s f r o m J u ly 2 0 0 8 p os e d a n e w intrig uing question. Neithe r an
increasing demand e mana t in g f orm e me rg i ng c ou ntr ie s, n o r ag ro -f ue l
p r odu c t i o n c ou ld t ot a ll y b e r e s p on s ib l e f or r is i ng p ric es, a nd the n f or th e ir
after mat h decre ase.
T he r e a s o n f or t he i nt e r e s t i n c e r e a l p r i ce v ola t i l it y i s t ha t c e r e a l s ( g r a i ns
o r cerea l gra i ns ) pr o vide m ore f ood ene rgy w orl d wide t ha n a ny ot her ty p e
of cr op; they ar e t here for e staple food. In some developing countries,
cere a ls in the for m of cor n ( whe at or r ice), c o ns t itute a l arge pr o po rt ion o f
t he ave rage h o use h old ’s da i ly su bs is te nce. In de ve loped countr ie s, t hey are
s t il l
im po rta nt,
al th oug h
t he ir
le ve l
of
per
substant ially lower than in deve loping countries.
4
c ap it a
co n sum pt i o n
is
Graph 1 – Selected cereal prices, US Dollars per Ton (1985-2009)
700,00
600,00
Barley
500,00
400,00
Corn
(Maize)
300,00
Rice
200,00
Wheat
100,00
2009
2007
2005
2003
2001
1999
1997
1995
1993
1991
1989
1987
1985
0,00
Source: IMF www.imf.org
T he fact or s a f fect in g ag ric u ltur a l co mm od ity pr ice s a re bot h su pp ly an d
demand drive n factors. Am o ng t he s u p p ly f a c t or s ( p a r t i a l ly e x p lo r e d i n t h is
a na ly s is
beca use
of
th e ir
st at ist ical
i ns ig n ifi c a nc e
in
our
regression
a na ly s is) , a r e i np u t c os t s a nd l a nd u t i l i za t i on . P r odu c t i v it y , d e f i ned a s y i e ld
per ha and m ade poss ible by re searc h and de velopme nt e ffort s, as well as
stoc ks are t he only supply-side fact ors inc luded in our stud y. T he
red uct io n s o f fo od s toc ks are par ti cu la rl y re lev a nt i n t he c on text of t he
Eu ro pea n Un i o n. Fr om a dema nd -s ide per sp ect iv e, t he p os si b le ex pl an at ory
v ar i ab le s are: po pu la ti on , GDP, dem and f or cere a ls f or en ergy pur p os es,
ex port s, ex change rates, and fut ures mar ke ts (as a proxy for t he speculat i ve
e leme nt) are the ret ai ned i n t he a na lys i s.
P o pu la t i o n is n or m a l ly in c lu d e d a s one v a r ia b le t h a t im pac t s o n w or ld f oo d
d e m a nd. A s o n c e e s p ou s e d b y Ro ber t M a l t h u s , a r is e i n t he p o p u l a t i on i s
necessar i ly limited by the means of its subsistence, imply i ng t hat a rising
p o pu l a t io n m u s t g o ha nd i n h a nd w it h a pr o po r t i o n a l i n c r e a s e i n t he s u pp l y
of ag ricu ltur al pr oducts .
The r apid income gr owth in some emer ging
c ountr ie s suc h as China and Ind ia in t he year s preced ing agric u ltur al pr ice
increases have led t o a fall in t he gro wt h r a t e o f t he p op u l a t i o n o f t he s e
c ou ntr ie s, wh erea s t hei r ch an g in g d iet pat ter ns, a s me nt i oned be l o w, ha ve
exer ted some strain on the demand for ce reals. Despite t hese trends,
p r odu c t i v it y r i s e s e x p la in w hy p op u la t i o n g r o wt h h a s bee n p l a y i ng on ly b u t
a s m a ll r ol e i n t he r i s e of f o od d e m a n d s i nce W W I I.
A sec o nd im p orta nt e x p l a nat ory v ar ia b le re lat e s t o i nc o me. GDP a nd p e r
ca p it a G DP ch an ges u su al ly ha ve a g reate r im pac t o n fo od dem and i n
de ve lo p i ng c ou ntr ie s (a nd on l ow - i nc ome gr ou p ho useh o ld s t herei n )
b eca use f ood co ns um pti o n f orm s a l ar ge r p a r t o f h ou s e ho l d s ’ b u d g e t s ,
5
c ompared wit h many ind ust rialised c ount rie s where food ex pe nditure
re pre se nts in ge nera l a sm a ll er p ro p or t i o n o f t he a ve r a g e ho u s e h old ’ s
b u d g e t , a nd w h e r e i t i s l e s s r e s p on s ive to c ha nge s i n b ot h i nc omes a nd
pr ices (E nge l’s law). The rise in GD P per c a p it a , n ot a b ly in t he e m e r g i n g
c ountr ie s during t he years preced ing the recent pr ice hikes, has led to
s h if t in g d iet p atter n s aw ay fr om cere a ls a nd to w ard s me at; t h is, in tu rn,
p u t s a n e x t r a p r e s s u r e o n t he d e m a nd for ce reals ( specifically wheat and
c or n) as a n i n p ut f or the i nc reas ed p r oduction of meat, upward pressures
t hat are depicted in Graph 2. Again, it seems a p riori t ha t i t is m ore th e
s h if t in g c o ns umer patt ern s ra the r than t he increase in population pe r se that
e x p la i n pr odu c t i o n i nc r e a s e s o ve r t he per i od u nd e r r e v ie w ( 20 0 1 - 0 9) .
Graph 2 – Cereal production trends, 1,000 tons (1985-2009)
900,0
800,0
700,0
600,0
500,0
BARLEY
CORN
400,0
300,0
RICE
WHEAT
200,0
19
8
19 5
8
19 7
8
19 9
9
19 1
9
19 3
9
19 5
9
19 7
9
20 9
01
20
0
20 3
0
20 5
0
20 7
09
100,0
0,0
Source: Authors’ elaboration based on USDA data.
C or n is t he t h ird larg est p l an ted c rop aft er w heat a nd r ice. Ev e n i f c or n h a s
b e e n c on s ide r e d a s a f o od c r o p f or q u iet s o m e t im e , i t ha s e v olv e d
g r a d u a l ly a s f e e d g r a in a f f e c t i ng t h e t r a d e vol u m e in r e s p o n s e t o r is i ng
dem and f rom t he fa st g ro w i ng l i ves toc k se ct or. Bes ide, c or n h as become
o ne of the m os t p op u lar r aw m ateri a ls of the ex pa nd in g et ha n o l i ndus try
d u r i ng t h e la s t y e a r s o f o u r a na ly s is . Ove r t he 1 9 8 5 - 2 00 9 p e r i od, g l oba l
c or n p r od u c t i on h a s i nc r e a s e d by 66 p e r c e nt ( f r o m 4 7 9 t ho u s a nds m i l li o n
t o ns i n 1 9 85 t o 7 9 7. 8 t h ous a nd s in 2 0 0 9) , w he r e a s it s c on s u m p t i o n h a s
r i s e n by 9 3 p e r c e nt ( f r o m 4 1 7. 7 t ho u s a nds t ons i n 1 9 85 t o 8 0 7. 4 t h ous a n d s
in 2009) . The harve sted are a increased by 18 per cent only, but average
c or n y ie ld s m o ved f r om 3 . 6 6 t o 5. 14 t o n s / h a r e s pe c t i ve ly in 1 9 8 5 a nd 20 0 9
( 40 pe r cent). T h is is the d irect r esult of t he b i ote c h n ol og y r e v ol u t io n ( wi t h
6
t he eme rgen ce of ge net ic al ly m od if ied c or n se ed Bt) 2 t ha t h as w id e ly
p en etra ted th e are a o f c or n pr oduct i o n. C or n i s t here fo re m ore c lo se ly
l i n ked t o c r u d e o i l be c a u s e it i s a r aw m a t e r ia l f or e t ha n o l p r odu c t i o n, a nd
it c an t herefore incre asingly be seen as a subst itute c ompone nt of crude oil.
C or n fo r fo od the ref ore i ncre as i ng ly c ompetes wit h c or n pr oduced for
e nergy pur po se s.
W heat is the m ost im port ant ce real in inter nat ional trade because of its
e a s in e s s o f t r a ns po r t a t io n a nd pr oce s s i ng pr oce sse s. In the list of sta p le
f o ods, i t ra nk s sec ond afte r r ice. A bo ut t w o t h ird s o f i t s pro d u c t i o n i s f or
h u m a n c on s u m pt i o n a nd a pp r ox im a t e ly o ne sixth is used for live st oc k feed.
W or ld w he a t prod u c t i on w a s e q u a l t o 3 6 3 m i l l ion t o ns i n 1 98 5 a nd in 2 00 9
i t r e a c hed 4 1 0. 5 m il l io n t on s . D u r in g t he s a m e p e r io d , pr odu c t i v i t y
i n crea sed w it h out re ach in g t he h ig h l eve ls obser ved dur i ng t he so called
“ gree n re volu tion” per i od.
Rice 3 is the t h ird most pr oduced cere a l in t he wor ld. Rice prod uct ion in
1 9 8 5 w a s a r o u nd 3 18 t ho u s a nds t o ns a nd by t he e nd o f 2 009 i t h a d r e a c h e d
4 3 6. 3 th ou sa nd s t on s. T he har ve sted area i ncrea sed fr om 1 4 4. 7 th ou sa nd s
t o 1 52 . 5 t h ou s a nds ha f r o m 1985 t o 2009 and prod u c t i vit y r ose fr om 3.2 3
t o 4. 2 7 t on s / ha i n 1 98 5 a nd 2 0 0 9 r e s pe c t ive ly. A t t he t im e o f w r i t i ng , n o
l ar ge
sca le p r oduc t ion o f
ge neti ca l ly
mod ified
r ice
is taking place.
C o ns um pt ion t rend s a re s i m il ar to th o se of p roduc ti o n ( 3 06 . 8 i n t h ousa nd s
t o ns 1 9 8 5 ver s u s 4 34 in 2 0 0 9) . I n t e r n a t i ona l t r a d e i s ve r y l ow , d u e t o a h i g h
l e ve l of d ome st ic c o nsum pt i o n i n p r oduc i ng co u ntr ie s. Rice p rod uct io n is
indeed cc once ntr ated in We ster n and Easter n Asia whic h acc ount for more
t ha n 90 per ce nt of t he t ot al w or ld p r oduct i o n. T he r o le o f s pec ul at i on i n
t he r ice m ar ket ha s u su al ly n ot bee n inc lud ed i n a na lyse s b ecau se of t he
marginal incide nce of r ice fut ures mar ket s and trade (T immer, 2009).
Ba r ley is mo re ad a pta bl e t ha n ot her c erea l s, i n t hat it to l erat es m an y
d i ver s e e n vir o nme nt s . It c a n be g r o w n o n s o i ls or a t a lt it u d e s u n s u ita b le
f or w heat. F urt herm ore, due t o i ts s al t and dr ou ght t o lera nce it ca n be
g ro w n ne ar d e sert a re a s. B a r le y i s a s t a p le gr ain f or m any a n ima l fe e d s i n
m any c ou nt ri es, b ut its i m po rta nce f or ma lt bev era ges i s a cu lt ura l fact or
t ha t c o ntr i bu t e s t o i t s s i gn i fic a nc e i n c e r t a i n p ar t s o f t he w o r ld . At t he
w o r ld le ve l, p r oduct i o n, t ot al c o ns um pt i on a nd h a r ve s t e d a r e a s ha ve s ho w n
a decrease over the 1985-2009 period. I n the pe r iod u nder a na ly s is, t he
h a r ve s t e d a r e a f e l l f r o m 8 0 t h ous a nds h a in 1 98 5 t o 55 . 2 t h o u s a nd s ha i n
2 0 0 9, t o t a l c on s u m pt i on f r om 1 6 8. 3 t hous a nds t on s t o 14 6 . 2 t ho u s a n d s
International trade in genetically modified corn is complicated by trade regulations within the WTO, namely, the
application of Sanitary and Phyto-Sanitary Measures and Technical Barriers to Trade (TBTs).
In our analysis we consider milled rice.
2
3
7
t o ns, a nd pro d u c t i o n f r om 1 7 6. 6 t h ou s a nd t o ns t o 1 4 8 . 9 t hou s a nd t o ns. O n
t he ot her h an d, pr oduct iv i ty i ncre ased fr om 2. 1 7 t o 2. 7 to ns/h a.
Graph 3 – Productivity trends, tons/ha (1985-2009)
6
5
4
BARLEY
3
CORN
RICE
2
WHEAT
1
INDEX
19
8
19 5
8
19 7
8
19 9
9
19 1
9
19 3
9
19 5
9
19 7
9
20 9
0
20 1
0
20 3
0
20 5
0
20 7
09
0
Source: Authors’ elaboration based on USDA data.
I n 2 0 0 8, s u p p ly r e s p ons e s t o h ig h p r ice s a nd l o w e r in put pr ice s ( m a i n ly
e nergy ) is evident in the c ase of c or n and wheat (Graph 2) where the
pr oduct i on increased, while it decreased f or ri ce. I n t he fu tu re, t he gr ow t h
o f c e r e a l p r o d u c t i o n c a n be pre d ict e d out s ide t he ind ust r ia l is ed n at ion s,
w h ere p roduc ti ve fact or s are n ot f u lly ut ilised. In fact , t here is a large
a mo unt
of u ncu lt i vated
or u nder ut i li zed
la nd, m ai n ly i n de ve l op i n g
c ountr ie s. T he re lat i vely large share of r ice in t ot al cereal prod uct ion
c omes from incre ased agr icultural pr oduct i vity ( Graph 3), but increased
p r oduct i o n re qu ire s h igh er p rod ucti v e c o sts per u n it. T he y ie ld of g ra i n
cr o ps has bee n i ncr eas in g s i nce t he ad ve nt o f t he agr ic ult ura l re v ol ut i on
a nd n o w a g r i c u lt u r a l pr odu c t i v it y g r o w t h is s lo wi n g .
8
Graph 4 – World exports of barley, corn, rice and wheat 1,000 tons (1985-2009)
160,0
140,0
120,0
100,0
BARLEY
80,0
60,0
40,0
CORN
RICE
WHEAT
19
8
19 5
87
19
8
19 9
91
19
9
19 3
95
19
9
19 7
9
20 9
01
20
0
20 3
05
20
0
20 7
09
20,0
0,0
Source: Authors’ elaboration based on USDA data.
W it h rega rd t o wor ld ex ports, it ap pe ar s t hat tr ade volume s in c orn a nd
wheat are sensit ive t o a number of ec on om ic c on d it io ns , suc h as t he g lo b a l
r ece s s i o n of 2 0 08 - 2 0 09 .
T he le vel o f e nd in g s t oc ks i s a n i m p o r t a nt s i g na l f o r c e r e a l s u p p l ier s a n d
t here f ore t he se st oc ks af fect pr ice s. T hese st ock s p lay the r o le of bu ffer
s toc k scheme s a nd, as a c onseq uenc e, t hey look as an attempt t o use cereals
f or t he a im o f st ab i l is i ng p r ices i n th e w or ld eco n omy. T hey are a reser ve
a ga i nst sh ort term sho rt ages and/ or in str ume nts to c on tr o l excess i v e
f l uctu at ions in t he commod ity pr ice s. B y analyzing gr aphs 1 and 5 toget her,
w e c an o b ser ve a neg at iv e c or re lat io n b e t we e n s t oc k s ( G r a p h 5 ) a nd w o r ld
pr ices (Graph 1): low stoc ks incr ease t he p erce pt i on of a reduct i on i n
supply; great fluct uat ions and a ge ner al dramat ic dec rease (exce pt in bar ley)
c a n be o b s e r ved m a i nly o v e r t he per i od 2 0 06 -2 0 0 8. T h e s e s t oc ks h a ve a
p o s it i ve r o le i n s t a b il i zi n g pr ic e s , w i t h s t oc ks i n c r e a s in g w h e n pr ice s a r e
l o we r ( wi t hdr a w a l o f s u p p ly by i nt e r ve nt i o n a g e nc ie s ) a nd f a l li ng wh e n
pr ices are higher ( flood ing mar ke ts wit h additiona l su pply). W it h reg ard t o
ope rat or s, it c ou ld be intere st ing to dist ingu ish be twee n inst it ut ional a nd
p r i vate
o per at ors.
Pr i va te
ope rat or s
a re
m oti v ated
by
s el f -eco n omi c
i n tere st, and p u b l ic ope ra to rs by pub l ic g oa ls. In t he an a lysed per i od, bo t h
p r i va t e a nd p u b l ic t y pe s of i nt e r v e nt io n s wer e a t p la y , a nd t he e x a c t
c on tr i but i on o f e it her typ e of op erato r s i s b eyo nd t he sco pe o f t he pre sen t
a na ly s is.
9
Graph 5 – Ending stocks in barley, corn, rice and wheat 1,000 ton (1985-2009)
250,0
200,0
BARLEY
150,0
CORN
100,0
RICE
WHEAT
50,0
19
8
19 5
8
19 7
8
19 9
9
19 1
9
19 3
9
19 5
9
19 7
9
20 9
0
20 1
0
20 3
0
20 5
0
20 7
09
0,0
Source: USDA.
3. Speculation
Spec ulat ion is st r ict ly linked t o endi n g s t oc ks. S pe c u l a t i on c a n be d e f in e d
a s t h e ass um pt i on of t h e r is k o f l os s i n r e t u r n f or t he u nc e r t a in po s s i b il i t y
of a re wa rd ( Roble s e t al, 2 0 09 ). On t he futu res m ar ket, spe cu la to rs m ay ac t
i n t he lo ng 4 a nd s ho rt 5 s id e of a ny s i ng le suc h transact ion, but in the
a ggre gate, th e ir c om mi tme nt s m ust o f fset any net imbalance in t he long and
s h ort hedger s’ p o si ti o n. S pec ul at i on ca n e it her reduc e pr ice f l uctu at io n s o r
a ggr av ate t hem; it c a n be s ta b il i s in g o r des ta b il is i ng. Ex ces si v e s pecu la t io n
i n t he c o m m od it ies f ut u r e s m ar ke t s c a n affect spot prices above le ve ls due
to standard supply and/or de mand dete rm in an ts t hr oug h fut ures p ri ces. I n
t he c o ntext o f fo od ma rke ts, pr ice v ol at i l it y c a n be h ig hl y d is r u p t ive i n
te rms
of
ec on om ic
po l ic y
a nd
de sta b i li s in g
f ro m
a
so c io -ec o nom ic
s t a nd p o i nt.
4
5
A ‘long position’ consists in the buying of a commodity with the expectation that the asset will rise in value.
A short position involves the sale of a borrowed commodity with the expectation that the asset will fall in value
10
Graph 6 – Futures Volumes (number of monthly exchanged futures contracts) 1985 – 2008
3500000
3000000
2500000
2000000
CORN
1500000
BARLEY
RICE
1000000
WHEAT
500000
31/01/85
30/04/86
31/07/87
31/10/88
31/01/90
30/04/91
31/07/92
29/10/93
31/01/95
30/04/96
31/07/97
30/10/98
31/01/00
30/04/01
31/07/02
31/10/03
31/01/05
28/04/06
31/07/07
31/10/08
0
Source: Bloomberg.
A m a r k e t wi t h a hi g h n u m be r o f c on trac ts is attr act i ve from a tr ading
s t a nd -p o in t . A s s h ow n i n g r a p h 6, t he main cere a ls mar ket s affected by
futures c o ntr acts are cor n and wheat, wher eas rice and bar ley mar ket s are
c har acter i sed by low a nd sta b le m oveme nt s. As wa s d iscu ss ed a bove, t he
f or mer tw o agr ic ul tur al c omm od iti es a re m ore a ffec ted by s ig n if ica nt
c ha nge s i n su p p ly a nd d e m and t ha n t he l at t e r t wo m ar ke t s . .
Ope n inte rest s re l ate t o t he me as ureme nt of th o se p ar t ici p ant s i n t he f utu re s
m ar ket w it h o u tst and i ng trad es. It r ep rese nt s t he ne t val ue o f a l l op en
p o s it io n s in o n e m a r ke t o r c o ntr a c t . W he n t he o pe n i nter est i ncre ase s w i t h
a c o r r e s p o nd i ng ly q u i c k r i s e i n pr ice s ( as in ou r case), more trade rs are
l i k e ly t o e nt e r l o ng p os it i on s 6. If the pr ice s keep r i sing, t he tr ader s in long
p o s it io n s w il l h a ve t he a b i l it y t o h o ld t he i r po s it i o n f or a g r e a t e r pe r i od o f
t im e w h i le t h o s e i n s ho r t p o s i t i o n a r e m o r e l i ke ly t o b e f o r c e d o u t of t he ir
posit io n. As depicted in graphs 6 and 7, w e c a n o bs e r ve a g re at var ia b il i t y
i n c or n f o l low e d by w he a t , b ot h i n t erm s of fu ture s and open intere sts; this
var i ability sig na ls t hat s pec ulat ion ha s a cruc ial r o le i n t he se a gr icu ltu ra l
c omm od ity m ar kets and h as p ote nt ia l ly a n imp or t a nt i m p a c t o n pr ic e s . B y
c ontra st, minor var i at ions c h arac terise r ice, and it ca n be a rgu ed t hat a
t r a d e -o f f a m o n g c or n a nd / or w he a t and rice is pote nt ially under play.
6
That said, for every new buyer of a futures contract, there must be a new seller, but the seller is likely to be
looking to hold a position for a few hours or days, hoping to benefit from the ups and downs represented by price
movements.
11
Graph 7 – Open Interests (number of still opened contracts at the end of the month) 1985-2008
700000
600000
500000
400000
CORN
BARLEY
300000
RICE
200000
WHEAT
100000
31/01/90
30/11/90
30/09/91
31/07/92
31/05/93
31/03/94
31/01/95
30/11/95
30/09/96
31/07/97
29/05/98
31/03/99
31/01/00
30/11/00
28/09/01
31/07/02
30/05/03
31/03/04
31/01/05
30/11/05
29/09/06
0
Source Bloomberg
T he re lat i ve st ability of r ice in both futures volumes and op en interests is
p ar ti a ll y due t o t he sm al l q ua nt ity of ric e tr aded o n th e in ter nat io n a l
m a r ke t a nd t o t he s t r o ng pu b lic p oli c ie s a d o pt e d by s om e p r odu c i ng a n d
c on sume r c ou ntr ie s as a c on seq uenc e of s oa ri ng p r ices .
4 . R es u lt s - Ex p la n a t o ry f a c t o rs o f c e r ea l p r i ce c ha n g es
I n o u r u n ieq u a t i on a l r e g r e s s i o n a na ly s is, t he d e pe nden t v ar i ab le i s t h e
logar i thm ic
of
IND_PR 7 ( i.e.
t he
s po t c e r e a l
p r ice
in d e x
bu i ld
by
S t a nd ard &Po o r’ s “S& P G SC I G ra ins I nd e x ” is u se d a s a be nc hmar k) . T he
u t i l is e d m e t h od i s Ord in ary Le ast Squa res ( OL S). S i nce t he inc rea se i n
demand for cere a ls may have d ifferent im p lic a t io n s in t h e s h o r t -r u n a nd i n
t he l o ng -run a t b ot h th e far m a nd macr oec on o mic l e ve ls (ec o no mi c a n d
s oc ia l ) , i t is c o n ve nie nt t o d i s t in g u i s h bet we e n t he m . Our a n a ly s is w i l l
neverthe less focus on the results in the long-run only 8.
T he s a m p le s p a ns o ve r m id - 2 0 01 t o D e c e m b e r 2 0 0 9 , a nd r e l ie s on h ig h
f reque ncy d a ta. A lt h ough n ot e very d at a p o in t i s a va i la b le f or t he e n t i r e
p er i od of t ime, E -V ie ws a ut omat ic al l y ad jus ts th e sam p le, co n s ider i ng on l y
t he per i od o f t im e f o r w h i c h a l l t i m e s e r ie s a r e s im u l t a ne o u s ly a va i lab l e .
7 It includes corn, soybeans, Chicago wheat (soft, red winter wheat) and Kansas Wheat (hard, red winter wheat or red
wheat) prices in variable proportions. Note that the utilisation of the logarithmic scale allows to linearise their
behaviour and to assess them in elasticity terms.
8 The long-run equation (Table 1) is not a spurious regression. All the variables that enter in the equation are integrated
of order one. Nevertheless, the ADF test on the residuals of this equation refuses the presence of unit roots, so that all
the variables in the model are cointegrated, that is, the regression coefficients are meaningful and can be interpreted as
long-run coefficients.
12
T he s h or t r u n r e g r e s s i on u t i l i s e s t he f ir s t d if f e r e nc e o f t he v a r ia b les . F or
t h is r e a s o n, a n ob s e r va t io n i s m is s i ng ( th e f ir s t ) a nd t he s a m p l e i s a d ju s t e d
w i t ho ut t he m is s in g d ata. A Newe y -We st HA C St a nda rd E rro rs & Co va ria nce
( l a g t r u n ca t io n = 4 ) e st im ator allows to obtain c o ns is te nt e st ima te s o f
standard err or s wit h re spect the a u t oc or r e la t i o n a nd h e t e r o s ke d a s t ic
e ffect s.
T he
va ri abl es
t he
est im ated
par ameter s
of
w h ic h
are
st at ist ica l l y
i n s ig n if ica nt h a ve be en e l im in ated f rom the a na ly s is. T h is lea ve s t he
f o l l ow i ng va ri a ble s, by o rder o f s i gn i fic a nce: l o ng po s iti o n of tr ader s,
ex port s, d ollar -euro exc hange r ate, e nd i ng s t o c ks, po pu la t i o n ( in ve r s e
r e l a t io ns h i p) , b io f u e l p r o d u c t i o n, pr oduc tivity ( i nverse relationship), and
f utu res. T he re su lts are g i ven i n Ta b le 1 (i n lo ga ri th mic le ve ls) , Ta ble 2
( perce nt age of increme nt s of the depend ent va ria b le L OG( IND_ PR) whe n
o ne ex p la nat ory var ia b le i s i ncre men ted by 1%) a nd T ab le 3 (pe rcen tage o f
increme nt s
of
the
de pe ndent
var i able
( IND_ PR),
wit hout
the
log
t r a ns f or m a t io n , if o ne e x p la na t ory va ri a ble is i ncre men ted by 1 %).
F ir st of al l, t he re su lts o f t he ad ju sted R -s quared s h o w th at m ore t h an 9 3
p e r c e nt o f t he v a r ia t io n of c e r e a l prices is ex plained by t he regression
a na ly s is a nd t h at t h is mo d e l has t he re fore a rather large e x p li c a t i ve p o we r .
13
Table 1 – Regression results – long-run analysis (levels)
Dependent Variable: LOG(IND_PR) (Price Index)
Sample: 2001M06 2009M12: observation: 103
Newey-West HAC Standard Error & Covariance (lag truncation=4)
Coefficient Std. Error
t-Statistic
Prob.
C
158.1056
45.40055
3.482460
0.0008
LOG(POP) (Population)
-10.38862
2.946464
-3.525793
0.0007
0.530789
0.151394
3.506000
0.0007
-2.232498
0.835315
-2.672643
0.0089
0.622805
0.142500
4.370549
0.0000
2.786491
0.413784
6.734175
0.0000
LOG(EXRATE) (Exchange Rate) 1.153424
0.201476
5.724874
0.0000
0.010637
0.004344
2.448719
0.0162
0.516327
0.047049
10.97415
0.0000
LOG(BIOC_PROD)
(Biofuel
production)
LOG(IND_Y)
(Productivity
Index)
LOG(IND_ES) (Index of Ending
Stocks)
LOG(IND_EXP)
(Index
of
Exports)
LOG(INDEX_FUTVOL/INDEX
_OPINT) (Index of Futures)
LOG(NC_LONG/(NC_LONG+
C_LONG)) (Long-term position
– 2 types of agents, private and
public)
Coefficient
R-squared
0.943718
Adjusted R-squared
0.938928
S.E. of regression
0.081758
Sum squared resid
0.628327
Log likelihood
116.4696
F-statistic
197.0209
Prob (F-statistic)
0.000000
W it h reg ard t o t he pa rt ial corre lat i on, t he va lue is very hig h in the c ase s of
p o pu l a t io n a nd bi o f u e l p r odu c t i on ( a lm ost equal -1 and 1 respec tively),
s h o wi ng a s t r o ng c or r e la t i on b e t we e n t he se s in gle exp l an at ory v ar ia b les an d
t he de pe nden t one s. Med ium le ve ls a re o b ser ved i n t he i ndex of ex p ort s
and exchange rate, while lower corre la t ions c har acter i se t he ind ex of
f utu res, t he i n dex o f end i ng st oc ks, t he l o ng term p os it i on s a nd f i na l ly t he
p r odu c t i v it y i nd e x .
T he pe rce nta ge var iat ions in loga rit hm ic sc ale (T able 2) show t hat a one
p e r c e nt i nc r e a s e i n po pu la t io n w i ll d ec rease cere a l pr ices by 29 perce nt ,
14
a nd t hat a on e pe rcen t in crea se in bi o fue l pr oduct i o n w i l l r es u lt i n a 0. 56
perce nt increase in pr ice.
Table
2
–
Percentage
of
increments
(Δ%)
of
the
dependent
variable
LOG(IND_PR) when one explanatory variable is incremented by 1%
Explanatory Variables
Δ%
partial correlation
LOG(POP) (Population)
-29.10%
-0.950177
LOG(BIOC_PROD) ) (Biofuel production)
0.56%
0.969061
LOG(IND_Y) (Productivity Index)
-0.51%
-0.323037
LOG(IND_ES) ) (Index of Ending Stocks)
0.39%
0.244521
LOG(IND_EXP) (Index of Exports
1.50%
0.572330
LOG(EXRATE) (Exchange Rate)
0.04%
0.554814
0.004%
0.049314
0.11%
0.317493
LOG(INDEX_FUTVOL/INDEX_OPINT)
)
(Index
of
Futures)
LOG(NC_LONG/(NC_LONG+C_LONG))
(Long-term position – 2 types of agents, private and
public)
Table 3 – Percentage of increments of the dependent variable IND_PR when
one explanatory variable (without the log transformation) is incremented by
1%
POP (Population)
-4.39%
BIOC_PROD ) (Biofuel production)
0.23%
IND_Y (Productivity Index)
-0.96%
IND_ES) (Index of Ending Stocks)
0.27%
IND_EXP (Index of Exports)
1.21%
EXRATE (Exchange Rate)
0.50%
INDEX_FUTVOL/INDEX_OPINT) (Futures)
0.005%
NC_LONG/(NC_LONG+C_LONG) (Long-term position –
2 types of agents, private and public)
0.22%
I n g e ner a l , t h e i n ver s e r e la t i o ns h ip b et wee n pr oduc ti v ity a nd pr ice i s rat her
l o g ica l a nd c on s ist en t wi t h h i st or ical tre nds , w here as t he neg at i ve s ig n fo r
t he p op u l a t io n c oe f f ic ie n t im p li e s t h a t t h e g r ow i n g w or ld p o pu l a t io n d oe s
p ut a st ra i n o n t he w or ld agr ic u ltur al sys tems ind eed, but t ha t t h is is not s o
much t he case for the prices of t he four cere a ls analy sed he re. T he positive
re l at io ns h i p ex i st in g bet wee n t he lo n g po s it i o n o f t r a d e r s ( o n a ve r a g e
c orre l at e d bu t t he mo st s i gn i fic a nt va ri a ble o f a ll , see T a b le s 2 a nd 1 ) an d
cere a l price sugge st s that speculation d oe s p la y a m a jo r r o l e i n e x p la i n i ng
cere a l price increases over the per i od. T h is fi nd in g is c o ns iste nt acr os s th e
t w o t y pe s of a na ly se s ( in l e ve ls a nd i n p e rce nt age c ha nge t e rm s, w it h a nd
15
w i t ho ut a lo g tra n sf orm at io n) a s w e ll a s i n t he s ho rt -ru n (re su lts n ot
re ported he re).
T he im po rta nce of ar bi tr age on i nte rn at io n al m ar kets i s c orr o bo rated by
t he r e s u lt f or e x p or t s w h ic h is a l s o a hi g hl y s i g n i f ic a n t e x p la na t o r y
v ar i ab le. A lt h oug h le ss s i g ni f ica nt, but highly c or related t o t he cereal
p r ic e s , b i ofu e l pr odu c t io n d oe s a l s o p lay an im porta nt r ole in t he upward
tr end of cereal pr ices, wit h a one per c e nt inc r e a s e i n b i ofu e l p r od u c t io n
r e s u lt i ng i n n e a r ly a 0.56 i n a l og a r it hm ic s c a le , a nd 0. 2 3 per c e nt w it ho u t
t he l og tra n sf or mat i on in the p rice of the analy sed ce reals.
F i na l ly , t he p o s it i ve a nd s t a t i s t ic a l ly s ig ni f ica nt r e l a t io ns h i p b e t we e n pr ice s
a nd t he d ol la r-e ur o e x c h a nge r at e re fle cts t he re lative de prec iation of t he
d o ll ar v is - à-v i s th e eu ro o v er t he t ime pe r iod, a nd i t ma y th r ow a n ote o f
c a u t i on o n t he i nt e r p r e t a t io n o f pr ice i nc r e a s e s i n no m in a l t e r m s ( t he
i m pac t o f t h i s e x p la na t o r y va r i a b le o n c e r e a l pr ice s is 0. 0 4 a nd 0. 5 0 wi t h
a nd w it h out a l o g t ra ns fo rma t io n) . C e rea l pr ic e s a r e d e nomi n a t e d i n d ol l a r
te rms, but fo od pr ice i ncre ase s are s om e w ha t c u s h i o ned i n c o u n t r ies w i t h
an appr eciating exc hange rate, such as t h ose of the euro-area.
5. Co nclu ding remarks
T he pre se nt c r is is s h ows s ome s im i la ri t ies w it h t he w or ld f oo d cr i s is o f t he
1 9 7 0 s whe n t he g r e e n r e v o l u t io n was i mp le m e nt e d . B a d wh e t her c o nd it io n s
i n 1 9 72 ca us ed w or ld fo od pr oducti o n t o d ro p, a nd th i s wa s f ol l o wed by
t he 1 97 3 o i l s h oc k. I n t h a t d e c a d e , w or ld cereal pr ices were higher t han
e ve r be f o r e , a nd t h i s l a s t e d u nt i l t he 1 98 0s . Bey ond t hes e a pp are nt
s im i la r it ies, what are the d i ffer ence s wit h the curr en t s it uat io n ? T o a nsw er
t h is que st i on , so me r ele va nt f act or s aff ect in g w or ld pr ice s ha ve to b e
rec a lled.
T he sh or t- term f act ors a re g ene ral l y rec og n ised as c o nduc i ve to pri ce
increases. These fact or s are : adverse weat her co nd it i o ns, reduc t io n in f o od
s t oc k s , i nt e r na t i o na l t r a d e p o l ic ies ( s u c h a s t he im p os it i o n o f e x po r t
r e s t r ic t i o ns) , m od i f ic a t io n o f pr odu c tive costs (ene rgy, fertilisers), and
m ar ket in g po w er a s f ar a s c o nsumer s a re c oncer ned. I n t he l on g- term,
r i si ng b io fue l p rod uct ion , gr ow i ng dem and f rom emer g in g co un tr ies, a nd
l i m ited pr oduc ti v ity gr ow t h c an b e l i sted . H o we ver, t he i ssue s urr ou ndi n g
t he im pa ct of t hese f act or s on c ommo d ity pr ice s i s rat he r c om p lex.
Seve ral studies have considered t he impact of biofuel pr oduction on pr ice
c e r e a ls. A p o s it i ve c or r e l a t io n ha s n o rma l ly b ee n u nder li n ed, but th e
me asure of growing rene wable e nergy on world cereal pr ice s d iffer s from
a u t ho r t o a u t h or. L e s s e x p l ore d h as bee n th e i ssue o f s p ecu lat i on o r
a r b it r a g e b y i n t e r na t i o nal t r a d e r s .
16
W it h t he he lp o f a r e g r e s s io n a n a l y s i s , we ide nt if y a num ber o f su pp ly -si de
a nd dema nd- s ide ind epen den t v ar ia bl es t ha t a r e r e s p o ns i b le f or c e r e a l p r i c e
t r e nd s . Our r e s u lt s s ho w t ha t s pe c u la t i o n ( d e f i ne d by t he l on g po s it io n o f
t r a d e r s ) ha s p l a y e d a c r u c ia l r o le d u r i n g t he per io d u nd e r r e v i e w ( J u ne 20 0 1
– D e c e m be r 2 0 0 9 ) . A c c o r d in g t o ou r a na ly s i s , s pe c u la t i on i t i s t he m o s t
re le va nt i nde pe nden t var ia b le t hat a ffec ts cereal pr ices. Ex ports, in some
way s c onnected t o t he forme r variable, oc cupy sec o nd plac e, in term of
signific ance. However, the ir impact on cere a l pr ices is le ss r ele vant than
t ha t of b i ofue l p rod uct io n , i n te rms o f t he s h ock r ep rese nted by t he pr ice
r i se. P o pu lat i on gr o wt h ( gene ra l ly rec og n ised a s a p os it i ve d et erm i nin g
dr i ver o f foo d/cere al pr ice s) d oe s n o t ha ve imp act i n a po s it i ve wa y o n
cere a l pr ices; it acts in t he opposite d irec ti o n due t o th e c ha nge in d iet s
( fr om vegeta b le t o an im al pr ote i ns ), im pl yi ng t ha t po pu la ti o n i ncreas e s
w o u ld te nd to a ffec t pr im ar il y ot her agr icu l tura l m ar ket s.
E x c e s s i ve vo l a t i l it y i n f o od pr ice s , a s t ha t o bs er ved i n t he la st ye ars o f t he
p er i od u nder study i n th i s art ic le, is a dr ama tic q ues ti o n. Fr om a deman d
p o i nt o f vie w , c o nsu m e r s in d e v e l op i n g c o u n t r ie s a nd vu l ne r a b le i nc om e
g ro up s i n ot her c ou ntr ie s ha ve t o b e pr otec ted (A nr iq ue z G. et a, 2010,
B r o w n, 20 06 ) . Cere a ls a re a st ap le f o od and , ac c ord i ng t o E nge l’s l aw , a
l ar ge sh are o f l o w - inc ome gr ou p h ou se ho ld s ’ i nc om e i s s p e n t o n f o od. W it h
cere a l pr ices i nc reas es, t he l i ke l iho od o f m aln utr i ti o n i ncre ase s. On t he
o t her ha nd, w he n pr ices de crea se, s up p ly te nds to fa l l acc ord i ng t o t he
d ir e c t r e la t io n s hi p e x i s t i n g bet we e n q ua nt ity an d pr ice. No t sur pr i si ng ly,
h i g h p r ic e s h a ve t e nde d t o e nc ou r a g e a n e x p a n s io n i n t he g lo b a l prod u c t i on
o f c e r e a ls i n 2 0 0 9. H o we ver , a c c or d i n g t o t he F A O ( 2 0 0 9) , t h is i nc r e a s e i n
supply affect s pr imarily de ve loped and some emer ging c ountr ie s.
M o re th an o ne
po l icy
on bo th i n ter nat ional mar ke ts (t rade re lated
m e asu r e s, st oc k p o l ic ies , ne w r u les o n fut ur e s m ar ke t s) a nd d om e s t i c
m ar kets ( at p r oduct i o n a nd c on s u m p t io n le ve ls) h a ve t o be in t r odu c e d s o a s
t o le s s e n f oo d / c e r e a l l ow e r pr ice v ol a t i l it y . S pe c u la t io n, b i ofu e l pr odu c t io n
a nd , t o a le s s e r d e g r e e , p r odu c t i v it y c an be r e g u l a t e d . E ve n i f i t is s t i l l n o t
c lear whet her spec ulat ion affec ted phy sical mar ket s or whet her it was t he
g rowt h of the m ar kets it se lf that nurtured speculat i on, it is c lear from the
a na ly s is pr ov i ded he re th at spec u lati o n c an a nd h as t o be cu s hi o ned wi t h
m ore se vere r u les in t he inter n at ional m a r ke t s . T he l im it e d f u e l r e s ou r c e s
a nd t he ir imp a c t on c l im a t e c h a n g e s r e q u ire m o r e b i of u e l p r odu c t i o n, b u t
t h is could ta ke pla ce under the cond it ion that t he food secu r ity is more
im portant than e ner gy secu rity (Pe s kett et al , 2 00 7, Vo n B r a u n a nd
P a c ha u r i, 2 00 6 ) . P r odu c t i o n c a n be b o o s t ed with a fairer access to inpu ts
by farme rs, m ainly those le aving in ru ra l a nd marg ina l area s.
17
O n e way i n w h i c h t h i s a na ly s i s c ould b e d eve l o ped f ur th er i s by
d ise nt ang ling the private oper at ors f r om t he p u b lic o pe r a t o r s f r om t he
g r o u p o f a g e n t s w h o t a ke a l on g po s it i o n.
B i b li o g ra ph y
A nr i q u e z
G,
D a id o ne
S,
Ma ne
E
( 20 1 0)
R i s in g
f oo d
pr ice s
a nd
u nder n our i sh me nt, a cro s s-c ou nt ry i n qu iry. E SA w or k in g pa per N o. 10- 0 1.
F A O.
B r o w n L ( 2 00 6 ) E t h a n o l c ou ld le a ve t he w or ld hu ng r y . F or t u n e .
F A O ( 2 0 0 9) W or ld f o od a nd a g r ic u l t u r e in r e v ie w .
I FR I ( 2 0 08 ) B i ofu e l s a nd g r a i n pr ices: Im pacts and polic y responses.
Kut as, G , L i ndbe rg, C a nd St eenb l i k, R ( 2 00 7 ) B io fue ls: A t w ha t co st ?
G o ver nme nt S u p po rt for Et ha no l an d B i od iese l i n t he Euro pe a n Un i on . A
r e p or t f or t h e In t e r na t io n a l In s t itu t e f or S u s t a in a b le D e ve lo p m e n t , G e n e va,
S w it ze r l and .
M i tch el l D ( 2 0 08 ) A note o n r is i ng f o od p ric es . P ol icy r es earc h wor ki n g
p a per No. 46 8 2. W or ld Ba n k
M u l le r A ( 20 0 8 ) S u s t a i na b le a g r ic u ltu re a nd t he p r odu c t i o n o f b iom a s s f or
e ne r g y u s e . C l im a t ic c ha n g e 9 4: 3 1 9 -3 3 1. d oi: 10 . 1 0 0 7/ s 1 0 5 84 - 0 0 8 -9 5 0 1 -2 .
P a c e N , S e a l A , C os t e l l o A ( 2 0 0 8) F ood c om m od ity d e r iv a t iv e s : a ne w c a u se
of
m a ln u t r it i o n?
T he
L a nc e t
3 7 1 : 1 6 4 8- 1 6 5 0.
d o i: 1 0. 10 1 6/ S 01 4 0 -
6 7 3 6( 0 8) 6 0 70 7 - 2.
Pe skett L, Slater R, Ste ve ns C, Dufey A ( 2 0 07 ) B i o f u e ls, a g r ic u l t u r e a nd
pove rty r educt ion. N atura l resou rce perspec tive s 107, OD I.
R o b le s M, T o r e r o M, V on B r a u n J ( 20 0 9 ) W he n s pe c u l a t i on m a t t e r s . I F P R I
Issue Brief 57.
T imme r P C ( 2 0 09 ) D id s pec ul at i on a ffec t wo r ld r ic e pr ices ? E SA w or k in g
pa per No. 09-07. FAO, Rome.
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V o n B r a u n J , P a c ha u r i R K ( 2 00 6 ) T he pr om ises a nd c ha l len ge s o f bi o fue l s
of the po or in deve loping countr ies . I F P R I 2 0 05 -2 0 0 6 a nn u a l r e p or t .
W ah l P (2 00 9 ) F o od sp ecu la ti o n, t he ma i n f act or of t he p r ice bu bb le i n
2 0 0 8. W E E D .
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