Fighting Global Food Price Rises in the Developing World: The Response of China and Its Effect on Domestic and World Markets. Jikun Huang, Jun Yang, Huanguang Qiu Center for Chinese Agricultural Policy (CCAP), CAS Scott Rozelle Stanford University.
Fighting Global Food Price Rises in the Developing World:The Response of China and Its Effect on Domestic and World Markets
Jikun Huang, Jun Yang, Huanguang Qiu
Center for Chinese Agricultural Policy (CCAP), CAS
Rise of China
Weak US dollar
Oil price and increasing freight rates
Global pressure on food prices and food supplies is causing rising concern in the world about the welfare and food security of many in developing countries … and is even being blamed for social and political unrest
To ease the mounting pressures and to avoid the damage that food crisis could bring to China’s economy, officials called for the use of a broad spectrum of policy measures to counteract the price rise. Many actions were immediately taken.
The Genetic Revolution and real global cereal price index in 1905-2005 (All prices = 100 in 1960)
Sources of international food price changes
Source: Yang, Qiu, Huang, Rozelle (2008)
In absence a response by government, rising price internationally
could be expected to lead to higher prices domestically
Source: Huang, Yu, Rozelle and Martin (2008)
(Have means to operate in the short run)
(No much policy measures available in short run)
(Little traded due to SPS and other NTBs)
No any means to force down prices in the short run:
No stock + about 60% domestic consumption is imported
actual world biofuel production
Current and Projected Total Biofuels (bioethanol and biodiesel) Production in the Next 30 Years.
Source: Msangi, et al., 2007
The combined impact of all of China’s policy responses (and other
factors except for oil price and biofuels) are captured by the residual.
Answer: No. Indeed farmers are shifting production from grain to edible oil crops. In the longer run it is inevitable that China will confront great pressures of rising grain price in near future.
China has been a net food exporter duringits rapid growing period in the past 3 decadesAgricultural export and import (billion US$), 1980-2006
China’s net export of rice, wheat and maize in 2005-2007
This means that at exactly the time that world food prices were taking off,
China was actually increasing shipments into international markets.
China’s net import soybean in 2005-2007
Only in soybeans, its imports did rise. Surely, a 15 percent rise
between 2005 and 2007 could not cause the world food crisis.
Biofuels will cause rise in food prices(unprecedented in last 100+ years), it could have huge effect on many parts of the population …
Biofuel era ?