How Vulnerable Are Arab Countries to Global Food Price Shocks?

This paper presents new estimates of pass-through coefficients from international to domestic food prices by country in the Middle East and North Africa. The estimates indicate that, despite the use of food price subsidies and other government interventions, a rise in global food prices is transmitted to a significant degree into domestic food prices in many countries in the Middle East and North Africa, although cross-country variation is significant. In nearly all countries, domestic food prices are highly downwardly rigid. The finding of asymmetric price transmission suggests that not only international food price levels matter, but also food price volatility. High food pass-through tends to increase inflation pressures, where food consumption shares are high. Domestic factors, often linked to storage, logistics, and procurement, have also played a major role in explaining high food inflation in the majority of countries in the region.

Bibliographic Details

Main Authors:	Ianchovichina, Elena, Loening, Josef, Wood, Christina
Language:	en_US
Published:	World Bank, Washington, DC 2012-03
Subjects:	agricultural commodities, Agricultural Economics, Agricultural Price, Agricultural Prices, Agriculture, annual growth, barley prices, beef, bill, bills, bread, Central Bank, cereal imports, commodities, commodity, commodity markets, Commodity price, commodity prices, consumer price, consumer price index, consumer prices, consumption basket, core inflation, corn, corn prices, currency, customs duties, dependency ratios, depreciation, developing countries, developing economies, domestic consumption, domestic currency, domestic demand, domestic exchange, domestic exchange rate, domestic inflation, domestic market, domestic markets, Domestic price, Domestic price levels, domestic prices, Economic Developments, Economic Policy, edible oils, effective exchange rate, Energy Prices, exchange rate, exchange rate choice, exchange rate fluctuations, exchange rate shocks, exchange rates, exogenous factors, expenditures, exposure, external factors, Famine, financial crisis, Fiscal Balances, fiscal deficits, food availability, Food Chain, food consumption, food crisis, food demand, food exports, Food Grains, food imports, food insecurity, food markets, Food Policy, Food Policy Research, Food Price, food price analysis, food price controls, food price inflation, food price subsidies, food prices, food product, food products, food reserves, food security, food subsidies, food subsidy, foodstuff, gauge, gold, government debt, government interventions, grain prices, grain reserves, grains, growth rates, IFPRI, import, import demand, import prices, import protection, income, incomes, inflation expectations, inflation rates, inflationary expectations, inflationary pressures, international commodity prices, International Financial Statistics, International Food Policy Research Institute, international market, international markets, international price, International prices, international reserves, Low-income Countries, macroeconomic indicators, macroeconomic management, market conditions, market distortions, market exchange rates, market information, market infrastructure, meat, nominal exchange rate, Oil Exporters, oil exporting countries, Oil Importers, oil prices, oil products, olive oil, palm oil, particular country, Political Economy, population growth, price control, price controls, price decrease, Price Distortions, price fluctuations, price increase, price increases, price index, Price Instability, price level, price levels, price movements, price policies, price risk, price stability, Price Trends, price volatility, producer prices, public policy, regional trade, retail, retail price, rice, risk management, savings, seasonal factors, shortfalls, sorghum, soybean, stock management, subsidy policies, sugar, sugar price, sugar prices, supply chain, supply curve, tax, total imports, transaction costs, Uncertainty, wheat, wholesale markets, wholesale price, world price, world prices,
Online Access:	http://hdl.handle.net/10986/11976
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