scholarly journals The Impacts of Trade Restrictions on World Agricultural Price Volatility during the COVID‐19 Pandemic

2021 ◽  
Vol 29 (6) ◽  
pp. 139-158
Author(s):  
Wenshou Yan ◽  
Yan Cai ◽  
Faqin Lin ◽  
Dessie Tarko Ambaw
Keyword(s):  
Price Volatility ◽  
Trade Restrictions ◽  
Agricultural Price

scholarly journals Managing agricultural price volatility in Africa. Context matters for policy effectiveness

2011 ◽  
pp. 1-4
Author(s):  
Elodie Maître d'Hôtel ◽  
Arlène Alpha ◽  
Raphaël Beaujeu ◽  
Françoise Gérard ◽  
Laurent Levard
Keyword(s):  
Price Volatility ◽  
Policy Effectiveness ◽  
Agricultural Price

The Microeconomics of Agricultural Price Risk

2020 ◽  
Vol 12 (1) ◽  
pp. 149-169
Author(s):  
Chris M. Boyd ◽  
Marc F. Bellemare
Keyword(s):  
Price Volatility ◽  
Economic Life ◽  
Empirical Literature ◽  
Future Research ◽  
Price Risk ◽  
Policy Uncertainty ◽  
Risk And Uncertainty ◽  
Economic Agents ◽  
Agricultural Prices ◽  
Agricultural Price

Much of neoclassical economics is concerned with prices—more specifically, with relative prices. Similarly, economists have studied behavior in the face of risk and uncertainty for at least a century, and risk and uncertainty are without a doubt a feature of economic life. It is thus puzzling that price risk—that is, unexpected departures from a mean price level, or price volatility—has received so little attention. In this review, we discuss the microeconomics of price risk. We begin by reviewing the theoretical literature, a great deal of which is concerned with the effects of unstable agricultural prices on the welfare of producers, consumers, and agricultural households. We then discuss the empirical literature on the effects of price risk on economic agents. We emphasize policy responses to agricultural price risk throughout, discussing price stabilization policies from both theoretical and empirical perspectives. Perhaps most importantly, we provide several suggestions for future research in the area of price risk given increasing risk on world agricultural markets due to both policy uncertainty and climate change.

Agricultural price volatility and speculation by commodity index funds: a theoretical analysis

2017 ◽  
Vol 77 (3) ◽  
pp. 429-444
Author(s):  
Alexandre Gohin ◽  
Jean Cordier
Keyword(s):  
Price Volatility ◽  
Medium Term ◽  
Index Funds ◽  
Content Type ◽  
Data Limitations ◽  
Agricultural Price ◽  
Informational Externalities ◽  
Theoretical Analyses ◽  
Practical Implications ◽  
Price Spikes

Purpose The role that speculation in futures markets plays during food price spikes is a subject of lively dispute. This issue is often addressed with empirical analyses. They suffer from data limitations and focus on the short-term impacts. The paper aims to discuss these issues. Design/methodology/approach The authors develop a theoretical model to explain the behaviour of speculators and producers in futures and cash markets. Compared to the only two theoretical analyses by Vercammen and Doroudian where informational externalities are excluded and by Fishe et al. where production responses are excluded, the authors introduce both informational externalities and lagged production responses. Findings The authors find that the expanded net long positions of commodity index funds (CIF) are inconsistent with lower stock levels that typically prevail before the price spikes. These positions stimulate production, hence stocks, before the price spikes. Thus they contribute to soften the price volatility. Practical implications The simulation results indicate that before imposing new regulations on financial markets, such as position limits on index funds, their beneficial medium-term effect as a hedging instrument for commercial participants should not be omitted or underestimated. Originality/value Because the authors develop a second-best theoretical framework, the authors find that CIF are not a systematic cause of medium-term market swings.

scholarly journals Systemic Risk in Global Agricultural Markets and Trade Liberalization under Climate Change: Synchronized Crop-Yield Change and Agricultural Price Volatility

2020 ◽  
Vol 12 (24) ◽  
pp. 10680
Author(s):  
Yoji Kunimitsu ◽  
Gen Sakurai ◽  
Toshichika Iizumi
Keyword(s):  
Climate Change ◽  
Trade Liberalization ◽  
Crop Yield ◽  
Systemic Risk ◽  
Price Volatility ◽  
Agricultural Trade ◽  
Future Climate Change ◽  
Random Disturbance ◽  
Yield Change ◽  
Agricultural Price

Climate change will increase simultaneous crop failures or too abundant harvests, creating global synchronized yield change (SYC), and may decrease stability in the portfolio of food supply sources in agricultural trade. This study evaluated the influence of SYC on the global agricultural market and trade liberalization. The analysis employed a global computable general equilibrium model combined with crop models of four major grains (i.e., rice, wheat, maize, and soybeans), based on predictions of five global climate models. Simulation results show that (1) the SYC structure was statistically robust among countries and four crops, and will be enhanced by climate change, (2) such synchronicity increased the agricultural price volatility and lowered social welfare levels more than expected in the random disturbance (non-SYC) case, and (3) trade liberalization benefited both food-importing and exporting regions, but such effects were degraded by SYC. These outcomes were due to synchronicity in crop-yield change and its ranges enhanced by future climate change. Thus, SYC is a cause of systemic risk to food security and must be considered in designing agricultural trade policies and insurance systems.

scholarly journals International price volatility transmission and structural change: a market connectivity analysis in the beef sector

2020 ◽  
Vol 7 (1) ◽  
Author(s):  
Tetsuji Tanaka ◽  
Jin Guo
Keyword(s):  
Structural Changes ◽  
Price Volatility ◽  
Price Transmission ◽  
Food Crisis ◽  
Volatility Transmission ◽  
Agricultural Price ◽  
Global And Local ◽  
Beef Sector ◽  
Global Food ◽  
Global Food Crisis

AbstractDespite the abundance of literature on agricultural price transmissions and unexpectedly disrupted value chains from infectious disease outbreaks such as bovine spongiform encephalopathy and COVID-19, the importance of research on price connectivity in the international beef markets has largely been ignored. To assess agricultural price transmission issues, error correction-type models (ECMs) have been predominantly employed. These models, however, suffer a deficiency in that the method is incapable of depicting time-variant linkages between prices. This article examines the connections between global and local prices, as well as price volatility in the beef sector. Our analysis uses a generalised autoregressive conditional heteroscedasticity (GARCH) model with the dynamic conditional correlation (DCC) specification that enables us to identify market connection intensity dynamics. We pay assiduous attention to structural changes in the overall research processes to enhance the reliability of estimation. For the first time in meat or grain price transmission research, our autoregressive models have been developed with structural break dummy variables for DCC. The principal findings are that (1) local retail prices for Azerbaijan, Georgia, Japan, Kazakhstan, Kyrgyzstan, Tajikistan and the UK showed a structural change in mean or variance, all of which were identified after the global food crisis from 2007–2009, (2) international prices unidirectionally Granger-cause regional prices in Georgia, Tajikistan and the United States in both mean and volatility (accordingly, no country exhibited price or price-volatility transmission from regional to international markets), and (3) volatility liaisons between global and local beef markets are generally weak, but price volatility exhibited closer synchronisation around the 2008 global food crisis, which created structural changes during the period. This finding implies that national governments should shield domestic from global markets by implementing trade restrictions such as quotas or taxes in a global emergency.

Sign in / Sign up

Export Citation Format

Share Document