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The World Food Price Crisis

The World Food Price Crisis

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Published by: jkkoh2004 on Nov 13, 2011
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The Woilu Foou Piice Ciisis ŶŴŴŻ-Ŵ8

An analysis of the cause, effects anu ieactions.
Pianav Bajoiia
Bivya Rathi
Banh Tiuong Thi Phuong
Le Thi Ngoc uiao
EC0NŵŴŷ: Inteinational Economics A
Piof. Thia }ang Ping
0veiview
The Woilu Foou Piice Ciisis
Thiee main causal factois
Implications on Asian ueveloping nations
Analysis of goveinment actions
Conclusion
About the
ciisis
Implications
Analysis of
actions taken
Conclusion Causal Factois
THE WURLD FUUD PRICE CRISIS
The Woilu Foou Piice Ciisis
Piices iose uiamatically
in ŶŴŴŻ-Ŵ8
About the
ciisis
Implications
Analysis of
actions taken
Conclusion Causal Factois
The Woilu Foou Piice Ciisis
The "Silent Tsunomi"
- causeu political, social
anu economic uniest
About the
ciisis
Implications
Analysis of
actions taken
Conclusion Causal Factois
CAUSAL FACTUR ŵ:
FUEL PRICE HIKE
Bow the suige in fuel piices leu to highei woilu foou piices
About the
ciisis
Implications
Analysis of
actions taken
Conclusion Causal Factois
Fuel piice hike Fuel piice hike
ƽlood

ofuel
CAUSAL FACTUR Ŷ:
TRADE LIBERALIZATIUN
Tiaue libeialization
D°der Lhe Agreeme°L o° AgrnulLure of W1Cţ
D a°d LD are sLll allowed Lo mpose
subsdes LoLal°g $380b° a year
1hs large subsdy wpes ouL nompeLLo° ° a
loL of develop°g nou°Lres ° produn°g
ma°y food nommodLes
ueveloploq cooottles bove become oet fooJ
boyets
About the
ciisis
Implications
Analysis of
actions taken
Conclusion Causal Factois
Expansion of biofuel piouuction in E0 anu 0S
1he expa°so° leads Lo hgher prnes °
food nommodLes used Lo produne bofuel
le maeţ olseedsţ wheaLŧ ° Lhe D a°d
LD
s ptlce toketsţ poot cooottles stott
to soffet ftom blqbet ptlces
About the
ciisis
Implications
Analysis of
actions taken
Conclusion Causal Factois
The piice of iice.
W Incieasing conceins
about foou secuiity
in iice expoiting
countiies.
W Stait to impose
expoit taiiff to tiy
to piotect uomestic
consumeis.
About the
ciisis
Implications
Analysis of
actions taken
Conclusion Causal Factois
Fuel piice hike, biofuel piouuction anu tiaue libeialization
Fuel piice
hike
Bighei piouuction
anu tianspoitation
cost
Higber world
food prices
Bighei
uemanu foi
substitutes
Bighei uemanu foi
foou commouities to
piouuce biofuel
Faim subsiuy
by 0S anu E0
Woilu foou piices
uominateu by 0S anu
E0
E0 anu 0S
expanu biofuel
piouuction
Bighei foou piices in
0S anu E0
About the
ciisis
Implications
Analysis of
actions taken
Conclusion Causal Factois
CAUSAL FACTUR Ŷ:
FINANCIAL SPECULATIUN
Rising speculation
Rising speculative activity in the foou maikets
About the
ciisis
Implications
Analysis of
actions taken
Conclusion Causal Factois
1wo forms of
spenulaLo°
oard°g °
nommodLes
l°vesL°g °
agrnulLural
fuLures a°d
opLo°s
Boaiuing of commouities
About the
ciisis
Implications
Analysis of
actions taken
Conclusion Causal Factois
,ore nommodLes
are hoarded ° fear
of rs°g fuLure
prnes
,ore nommodLes
are hoarded ° fear
of rs°g fuLure
prnes
World dema°d
°nreases Ŷ supply
shorLage nreaLed
World dema°d
°nreases Ŷ supply
shorLage nreaLed
l°nrease ° prnes l°nrease ° prnes
Investments in futuies
About the
ciisis
Implications
Analysis of
actions taken
Conclusion Causal Factois
edge a°d exnha°geŴ
Lraded fu°ds
°nreased ° Lhe
forward mareL
edge a°d exnha°geŴ
Lraded fu°ds
°nreased ° Lhe
forward mareL
Coods were sold °
Lhe fuLures mareL for
a marŴup
Coods were sold °
Lhe fuLures mareL for
a marŴup
Caused false boosL °
dema°d °oL [usL for
no°sumpLo° buL
°vesLme°L
Caused false boosL °
dema°d °oL [usL for
no°sumpLo° buL
°vesLme°L
upply reduned as
supplers sLarLed Lo
sLon up for Lhe
fuLure
upply reduned as
supplers sLarLed Lo
sLon up for Lhe
fuLure
gh dema°dŴLow
supply l°nreased
prnes
gh dema°dŴLow
supply l°nreased
prnes
IMPLICATIUNS UF THE CRISIS UN
DEVELUPINC NATIUNS UF ASIA
Macroeconomic Implications
Foou Piice CPI Inflation
Inteiest
Rate
Investment
uBP
uiowth
About the
ciisis
Implications
Analysis of
actions taken
Conclusion Causal Factois
Microeconomic Implications
Piouucing anu Consuming Bouseholus
Rich anu Pooi Bouseholus
Poveity anu Subsiuy
About the
ciisis
Implications
Analysis of
actions taken
Conclusion Causal Factois
ANALYSIS UF THE ACTIUNS
TAKEN BY CUVERNMENTS
AND INTERNATIUNAL BUDIES
Incieasing foou piices: 0igent call foi uoveinments' actions
About the
ciisis
Implications
Analysis of
actions taken
Conclusion Causal Factois
Novembei
ŶŴŴŻ
Řŷŵ9¡mt
Eaily Apiil
ŶŴŴ8
Ř88Ź¡mt
Apiil ŶŸ, ŶŴŴ8:
ŘŵŴŴŴ¡mt
Piice of Rice
Incieasing foou piices: 0igent call foi uoveinments' actions
About the
ciisis
Implications
Analysis of
actions taken
Conclusion Causal Factois
- Pooi villageis
seize foou
fiom fielu anu
waiehouse
Thailanu
- Chaotic iice
buying: feai of
supply
shoitage
vietnam
- Piotest ovei
the soaiing
piice of soya
bean
Inuonesia
- Thieat of
famine
Philippines
uoveinments take action
About the
ciisis
Implications
Analysis of
actions taken
Conclusion Causal Factois
ŵ. Expoit iestiiction
Expoit ban anu
expoit tax
Rationale
- To stabilize the
uomestic piice
- To fight with
soaiing inflation
Neet heavy
objection fiom iice
impoiting countiies
(Philippines)
uoveinments take action
9hoLoť l° a supermareL ť All Lhe rne
baseLs are empLy ° nhaoLn buy°gŦ
Ŷ. Ban on speculative tiauing
Taken by vietnam's
goveinment aftei the
chaotic buying
Stiictly ban non-foou
tiaueis to tiaue foou
About the
ciisis
Implications
Analysis of
actions taken
Conclusion Causal Factois
uoveinments take action
}apan
About the
ciisis
Implications
Analysis of
actions taken
Conclusion Causal Factois
In late
Apiil, with
peimission
fiom 0S,
}apan
ielease it
national
iice ieseive
Suuuenly
flooueu the
maiket
with ŵ.Źmt
of iice
Naue a
suuuen
supply
suige
Quick anu
shaip piice
fall
We aie N0T having enough iice"
Panic buying anu hoaiuing
We aie N0T having enough iice"
About the
ciisis
Implications
Analysis of
actions taken
Conclusion Causal Factois
336
378
393
481
672
1024
908
737
732
694
686
600
360
0
200
400
600
800
1000
1200
Nonthly Piice of Rice
Souice: http:¡¡www.inuexmunui.com¡commouities¡.commouity=iice&months=ŵŶ
About the
ciisis
Implications
Analysis of
actions taken
Conclusion Causal Factois
CUNCLUSIUN
Conclusion
Speculation anu Sentiment
Supply anu Bemanu
uoveinment Action
About the
ciisis
Implications
Analysis of
actions taken
Conclusion Causal Factois
Thank You!
Points foi fuithei uiscussion:
Piices fell consiueiably since }une ŶŴŴ8.
uiowing population is a veiy impoitant causal factoi
as well
(neeu moie heie.just think about a few k guys.)

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