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Food commodity price volatility and food insecurity

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  • Sarris, Alexander

Abstract

The paper first reviews several issues relevant to global food commodity market volatility as it pertains to food security, and food importing developing countries, and then discusses international and national policies and measures to prevent or manage this volatility and related risks. It is shown that market volatility relates to unpredictability of market fundamentals, and price spikes occur when unpredictability increases excessively. The food security risks faced by food import developing countries are discussed and it is highlighted that the major risks involve not only large and unpredictable price variations but also trade finance as well as import contract enforcement. The problem of identifying a price spike is analyzed and it is seen that, despite difficulties in commodity modeling, there are empirical techniques that allow the assessment of the probabilities of price spikes, and could facilitate the triggering of responses. Suggestions are made concerning institutions and policies to assist developing countries better cope with the risks of commodity market volatility.

Suggested Citation

  • Sarris, Alexander, 2013. "Food commodity price volatility and food insecurity," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 2(3), pages 1-24, December.
    • Handle: RePEc:ags:aieabj:162072
    DOI: 10.22004/ag.econ.162072
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    References listed on IDEAS

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    Cited by:

    1. Aled W. Jones & Alexander Phillips, 2016. "Historic Food Production Shocks: Quantifying the Extremes," Sustainability, MDPI, vol. 8(5), pages 1-10, April.
    2. Blake, Daniella & Dawson, Carolina & Loeillet, Denis & Staver, Charles, 2018. "Can Global Climate Change affect Prices in the World Banana Market?," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 67(1), March.
    3. Ruoyu Xiong & Huan Peng & Xi Chen & Chenyang Shuai, 2024. "Machine learning-enhanced evaluation of food security across 169 economies," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(10), pages 26971-27000, October.

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