TY - BOOK ID - 136943845 TI - International Grain Reserves and Other Instruments To Address Volatility in Grain Markets PY - 2009 PB - Washington, D.C., The World Bank, DB - UniCat KW - Access to Markets KW - Commodity price KW - Commodity prices KW - Cost increases KW - Domestic market KW - Export market KW - Free market KW - International Economics & Trade KW - International trade KW - Macroeconomics and Economic Growth KW - Market access KW - Market price KW - Market prices KW - Market volatility KW - Marketing KW - Markets and Market Access KW - Petroleum prices KW - Price changes KW - Price fluctuations KW - Price increases KW - Price risk KW - Price volatility KW - Stocks KW - Volatility UR - https://www.unicat.be/uniCat?func=search&query=sysid:136943845 AB - 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. ER -