International Grain Reserves : And Other Instruments to Address Volatility in Grain Markets
In the long view, recent grain price volatility is not anomalous. Wheat, rice, and maize are highly substitutable in the global market for calories, and when aggregate stocks decline to minimal feasible levels, prices become highly sensitive to sma...
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| Format: | Policy Research Working Paper |
| Language: | English |
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2012
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| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090825154655 http://hdl.handle.net/10986/4220 |
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okr-10986-4220 |
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oai_dc |
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Digital Repository |
| institution_category |
Foreign Institution |
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Digital Repositories |
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World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ACCOUNTING ACCUMULATION OF DEBT AGGREGATE SUPPLY AGRICULTURAL COMMODITIES AGRICULTURAL COMMODITY AGRICULTURE ARBITRAGE AVERAGE PRICE BEHAVIOR OF PRICES BID CALL OPTION CAPITALIST ECONOMIES CARTEL CASH INFLOW COMMODITIES COMMODITY COMMODITY PRICE COMMODITY PRICES COMPETITIVE MARKET CONSUMERS CONSUMPTION INCREASES CONSUMPTION LEVELS CORN PRICE COST INCREASES COST OF CAPITAL DEBT DEMAND CURVE DEMAND GROWTH DEPOSITS DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DOMESTIC MARKET DOMESTIC PRICE DOMESTIC PRICES DUMPING ECONOMIC ORDER ECONOMICS RESEARCH EMERGING ECONOMIES ENERGY PRICE ENERGY PRICES EXCHANGE RATE EXCHANGE RATE MOVEMENTS EXISTING GOVERNMENT EXPECTED RETURNS EXPECTED VALUE EXPENDITURE EXPENDITURES EXPORT MARKET EXPORTER EXPORTERS EXPORTS FINANCIAL FLOWS FINANCIAL MARKETS FINANCIAL SECTOR FIXED INTEREST FIXED INTEREST RATE FLOOR PRICE FLOOR PRICES FOOD PRICE FOOD PRICES FORECASTS FREE MARKET FUND INVESTMENT FUTURES FUTURES CONTRACTS FUTURES MARKET FUTURES MARKETS GLOBAL CAPITAL GLOBAL MARKET GLOBAL MARKETS GLOBALIZATION GOVERNMENT EXPENDITURE GOVERNMENT FUNDS GOVERNMENT REVENUE HEDGE FUNDS HEDGES HOLDING HOLDINGS HOUSING MARKET HUMAN CAPITAL INCENTIVE EFFECTS INCOME INCOME GROWTH INCOMES INFLATION INSURANCE INTEREST COSTS INTEREST RATE INTEREST RATE POLICIES INTEREST RATES INTERNATIONAL BANK INTERNATIONAL COOPERATION INTERNATIONAL DEBATES INTERNATIONAL ECONOMY INTERNATIONAL FINANCE INTERNATIONAL MARKET INTERNATIONAL MARKETS INTERNATIONAL RESERVES INTERNATIONAL TRADE INVESTMENT BEHAVIOR INVESTMENT VEHICLES LIQUIDITY MARGINAL COST MARGINAL VALUE MARKET ACCESS MARKET BEHAVIOR MARKET CONDITIONS MARKET DEMAND MARKET ENVIRONMENT MARKET FAILURE MARKET INSTABILITY MARKET PARTICIPANTS MARKET PRICE MARKET PRICES MARKET REGULATION MARKET STABILIZATION MARKET STOCKS MARKET VOLATILITY MARKETING MARKETING BOARDS MATURITIES MONOPOLIES MONOPOLY OIL PRICE OIL PRICES OPTIMIZATION OPTIONS MARKETS OUTPUT PETROLEUM PRICES POLICY RESPONSES PORTFOLIO PORTFOLIO ALLOCATION PRICE BAND PRICE BEHAVIOR PRICE CEILING PRICE CHANGES PRICE EFFECT PRICE FLOOR PRICE FLUCTUATIONS PRICE INCREASE PRICE INCREASES PRICE INDEX PRICE INDEXES PRICE MOVEMENTS PRICE RISK PRICE SERIES PRICE STABILIZATION PRICE SUPPORT PRICE TRENDS PRICE VOLATILITY PRIVATE MARKET PRODUCTION COSTS PRODUCTION EFFICIENCY PUBLIC BUDGETS PUBLIC SALES PUBLIC STOCK PUBLIC STOCKS RANDOM WALK RESERVE RETURNS RISKNEUTRAL SALE SALES SMOOTHING CONSUMPTION SPOT MARKET SPOT PRICES STOCK ADJUSTMENTS STOCK DATA STOCKS STORAGE CAPACITY SUBSTITUTE SUBSTITUTION SUPPLIER SUPPLIERS SUPPLY SHOCK SUPPLY SHOCKS SURPLUSES TAX TAX POLICIES TRADE BARRIERS TRADE POLICY TRADING TRADING VOLUME TRANSACTION TRANSACTION COSTS TRANSPARENCY VOLATILITY WEALTH WORLD MARKETS WORLD TRADE WORLD TRADE ORGANIZATION WTO |
| spellingShingle |
ACCOUNTING ACCUMULATION OF DEBT AGGREGATE SUPPLY AGRICULTURAL COMMODITIES AGRICULTURAL COMMODITY AGRICULTURE ARBITRAGE AVERAGE PRICE BEHAVIOR OF PRICES BID CALL OPTION CAPITALIST ECONOMIES CARTEL CASH INFLOW COMMODITIES COMMODITY COMMODITY PRICE COMMODITY PRICES COMPETITIVE MARKET CONSUMERS CONSUMPTION INCREASES CONSUMPTION LEVELS CORN PRICE COST INCREASES COST OF CAPITAL DEBT DEMAND CURVE DEMAND GROWTH DEPOSITS DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DOMESTIC MARKET DOMESTIC PRICE DOMESTIC PRICES DUMPING ECONOMIC ORDER ECONOMICS RESEARCH EMERGING ECONOMIES ENERGY PRICE ENERGY PRICES EXCHANGE RATE EXCHANGE RATE MOVEMENTS EXISTING GOVERNMENT EXPECTED RETURNS EXPECTED VALUE EXPENDITURE EXPENDITURES EXPORT MARKET EXPORTER EXPORTERS EXPORTS FINANCIAL FLOWS FINANCIAL MARKETS FINANCIAL SECTOR FIXED INTEREST FIXED INTEREST RATE FLOOR PRICE FLOOR PRICES FOOD PRICE FOOD PRICES FORECASTS FREE MARKET FUND INVESTMENT FUTURES FUTURES CONTRACTS FUTURES MARKET FUTURES MARKETS GLOBAL CAPITAL GLOBAL MARKET GLOBAL MARKETS GLOBALIZATION GOVERNMENT EXPENDITURE GOVERNMENT FUNDS GOVERNMENT REVENUE HEDGE FUNDS HEDGES HOLDING HOLDINGS HOUSING MARKET HUMAN CAPITAL INCENTIVE EFFECTS INCOME INCOME GROWTH INCOMES INFLATION INSURANCE INTEREST COSTS INTEREST RATE INTEREST RATE POLICIES INTEREST RATES INTERNATIONAL BANK INTERNATIONAL COOPERATION INTERNATIONAL DEBATES INTERNATIONAL ECONOMY INTERNATIONAL FINANCE INTERNATIONAL MARKET INTERNATIONAL MARKETS INTERNATIONAL RESERVES INTERNATIONAL TRADE INVESTMENT BEHAVIOR INVESTMENT VEHICLES LIQUIDITY MARGINAL COST MARGINAL VALUE MARKET ACCESS MARKET BEHAVIOR MARKET CONDITIONS MARKET DEMAND MARKET ENVIRONMENT MARKET FAILURE MARKET INSTABILITY MARKET PARTICIPANTS MARKET PRICE MARKET PRICES MARKET REGULATION MARKET STABILIZATION MARKET STOCKS MARKET VOLATILITY MARKETING MARKETING BOARDS MATURITIES MONOPOLIES MONOPOLY OIL PRICE OIL PRICES OPTIMIZATION OPTIONS MARKETS OUTPUT PETROLEUM PRICES POLICY RESPONSES PORTFOLIO PORTFOLIO ALLOCATION PRICE BAND PRICE BEHAVIOR PRICE CEILING PRICE CHANGES PRICE EFFECT PRICE FLOOR PRICE FLUCTUATIONS PRICE INCREASE PRICE INCREASES PRICE INDEX PRICE INDEXES PRICE MOVEMENTS PRICE RISK PRICE SERIES PRICE STABILIZATION PRICE SUPPORT PRICE TRENDS PRICE VOLATILITY PRIVATE MARKET PRODUCTION COSTS PRODUCTION EFFICIENCY PUBLIC BUDGETS PUBLIC SALES PUBLIC STOCK PUBLIC STOCKS RANDOM WALK RESERVE RETURNS RISKNEUTRAL SALE SALES SMOOTHING CONSUMPTION SPOT MARKET SPOT PRICES STOCK ADJUSTMENTS STOCK DATA STOCKS STORAGE CAPACITY SUBSTITUTE SUBSTITUTION SUPPLIER SUPPLIERS SUPPLY SHOCK SUPPLY SHOCKS SURPLUSES TAX TAX POLICIES TRADE BARRIERS TRADE POLICY TRADING TRADING VOLUME TRANSACTION TRANSACTION COSTS TRANSPARENCY VOLATILITY WEALTH WORLD MARKETS WORLD TRADE WORLD TRADE ORGANIZATION WTO Wright, Brian International Grain Reserves : And Other Instruments to Address Volatility in Grain Markets |
| geographic_facet |
The World Region The World Region |
| relation |
Policy Research working paper ; no. WPS 5028 |
| description |
In the long view, recent grain price
volatility is not anomalous. Wheat, rice, and maize are
highly substitutable in the global market for calories, and
when aggregate stocks decline to minimal feasible levels,
prices become highly sensitive to small shocks, consistent
with storage models. In this decade, stocks have declined
due to high income growth and biofuels mandates. Recently,
shocks including the Australian drought and biofuels demand
boosts due to the oil price spike were exacerbated by a
sequence of trade restrictions by key exporters beginning in
the thin global rice market in the fall of 2007, which
turned market anxiety into panic. To protect vulnerable
consumers, countries intervened in storage markets and, if
they were exporters, to limit trade access. Recognizing
these realities, vulnerable countries are building strategic
reserves. The associated expense and negative incentive
effects can be controlled if reserves have quantitative
targets related to the consumption needs of the most
vulnerable, with distribution to the latter only in severe
emergencies. More-ambitious plans manipulate world prices
via buffer stocks or naked short speculation to keep prices
consistent with fundamentals. Past interventions of either
kind have been expensive, ineffective, and generally
short-lived. Further, there is no significant evidence that
prices do not reflect fundamentals, including export market access. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Wright, Brian |
| author_facet |
Wright, Brian |
| author_sort |
Wright, Brian |
| title |
International Grain Reserves : And Other Instruments to Address Volatility in Grain Markets |
| title_short |
International Grain Reserves : And Other Instruments to Address Volatility in Grain Markets |
| title_full |
International Grain Reserves : And Other Instruments to Address Volatility in Grain Markets |
| title_fullStr |
International Grain Reserves : And Other Instruments to Address Volatility in Grain Markets |
| title_full_unstemmed |
International Grain Reserves : And Other Instruments to Address Volatility in Grain Markets |
| title_sort |
international grain reserves : and other instruments to address volatility in grain markets |
| publishDate |
2012 |
| url |
http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090825154655 http://hdl.handle.net/10986/4220 |
| _version_ |
1764390466720104448 |
| spelling |
okr-10986-42202021-04-23T14:02:16Z International Grain Reserves : And Other Instruments to Address Volatility in Grain Markets Wright, Brian ACCOUNTING ACCUMULATION OF DEBT AGGREGATE SUPPLY AGRICULTURAL COMMODITIES AGRICULTURAL COMMODITY AGRICULTURE ARBITRAGE AVERAGE PRICE BEHAVIOR OF PRICES BID CALL OPTION CAPITALIST ECONOMIES CARTEL CASH INFLOW COMMODITIES COMMODITY COMMODITY PRICE COMMODITY PRICES COMPETITIVE MARKET CONSUMERS CONSUMPTION INCREASES CONSUMPTION LEVELS CORN PRICE COST INCREASES COST OF CAPITAL DEBT DEMAND CURVE DEMAND GROWTH DEPOSITS DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DOMESTIC MARKET DOMESTIC PRICE DOMESTIC PRICES DUMPING ECONOMIC ORDER ECONOMICS RESEARCH EMERGING ECONOMIES ENERGY PRICE ENERGY PRICES EXCHANGE RATE EXCHANGE RATE MOVEMENTS EXISTING GOVERNMENT EXPECTED RETURNS EXPECTED VALUE EXPENDITURE EXPENDITURES EXPORT MARKET EXPORTER EXPORTERS EXPORTS FINANCIAL FLOWS FINANCIAL MARKETS FINANCIAL SECTOR FIXED INTEREST FIXED INTEREST RATE FLOOR PRICE FLOOR PRICES FOOD PRICE FOOD PRICES FORECASTS FREE MARKET FUND INVESTMENT FUTURES FUTURES CONTRACTS FUTURES MARKET FUTURES MARKETS GLOBAL CAPITAL GLOBAL MARKET GLOBAL MARKETS GLOBALIZATION GOVERNMENT EXPENDITURE GOVERNMENT FUNDS GOVERNMENT REVENUE HEDGE FUNDS HEDGES HOLDING HOLDINGS HOUSING MARKET HUMAN CAPITAL INCENTIVE EFFECTS INCOME INCOME GROWTH INCOMES INFLATION INSURANCE INTEREST COSTS INTEREST RATE INTEREST RATE POLICIES INTEREST RATES INTERNATIONAL BANK INTERNATIONAL COOPERATION INTERNATIONAL DEBATES INTERNATIONAL ECONOMY INTERNATIONAL FINANCE INTERNATIONAL MARKET INTERNATIONAL MARKETS INTERNATIONAL RESERVES INTERNATIONAL TRADE INVESTMENT BEHAVIOR INVESTMENT VEHICLES LIQUIDITY MARGINAL COST MARGINAL VALUE MARKET ACCESS MARKET BEHAVIOR MARKET CONDITIONS MARKET DEMAND MARKET ENVIRONMENT MARKET FAILURE MARKET INSTABILITY MARKET PARTICIPANTS MARKET PRICE MARKET PRICES MARKET REGULATION MARKET STABILIZATION MARKET STOCKS MARKET VOLATILITY MARKETING MARKETING BOARDS MATURITIES MONOPOLIES MONOPOLY OIL PRICE OIL PRICES OPTIMIZATION OPTIONS MARKETS OUTPUT PETROLEUM PRICES POLICY RESPONSES PORTFOLIO PORTFOLIO ALLOCATION PRICE BAND PRICE BEHAVIOR PRICE CEILING PRICE CHANGES PRICE EFFECT PRICE FLOOR PRICE FLUCTUATIONS PRICE INCREASE PRICE INCREASES PRICE INDEX PRICE INDEXES PRICE MOVEMENTS PRICE RISK PRICE SERIES PRICE STABILIZATION PRICE SUPPORT PRICE TRENDS PRICE VOLATILITY PRIVATE MARKET PRODUCTION COSTS PRODUCTION EFFICIENCY PUBLIC BUDGETS PUBLIC SALES PUBLIC STOCK PUBLIC STOCKS RANDOM WALK RESERVE RETURNS RISKNEUTRAL SALE SALES SMOOTHING CONSUMPTION SPOT MARKET SPOT PRICES STOCK ADJUSTMENTS STOCK DATA STOCKS STORAGE CAPACITY SUBSTITUTE SUBSTITUTION SUPPLIER SUPPLIERS SUPPLY SHOCK SUPPLY SHOCKS SURPLUSES TAX TAX POLICIES TRADE BARRIERS TRADE POLICY TRADING TRADING VOLUME TRANSACTION TRANSACTION COSTS TRANSPARENCY VOLATILITY WEALTH WORLD MARKETS WORLD TRADE WORLD TRADE ORGANIZATION WTO In the long view, recent grain price volatility is not anomalous. Wheat, rice, and maize are highly substitutable in the global market for calories, and when aggregate stocks decline to minimal feasible levels, prices become highly sensitive to small shocks, consistent with storage models. In this decade, stocks have declined due to high income growth and biofuels mandates. Recently, shocks including the Australian drought and biofuels demand boosts due to the oil price spike were exacerbated by a sequence of trade restrictions by key exporters beginning in the thin global rice market in the fall of 2007, which turned market anxiety into panic. To protect vulnerable consumers, countries intervened in storage markets and, if they were exporters, to limit trade access. Recognizing these realities, vulnerable countries are building strategic reserves. The associated expense and negative incentive effects can be controlled if reserves have quantitative targets related to the consumption needs of the most vulnerable, with distribution to the latter only in severe emergencies. More-ambitious plans manipulate world prices via buffer stocks or naked short speculation to keep prices consistent with fundamentals. Past interventions of either kind have been expensive, ineffective, and generally short-lived. Further, there is no significant evidence that prices do not reflect fundamentals, including export market access. 2012-03-19T19:12:05Z 2012-03-19T19:12:05Z 2009-08-01 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090825154655 http://hdl.handle.net/10986/4220 English Policy Research working paper ; no. WPS 5028 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper The World Region The World Region |