The New Wheat Exporters of Eurasia and Volatility

Chapter
First Online:

Abstract

The rise of the Russian Federation, Kazakhstan and Ukraine as world wheat exporters has been accompanied by uncommonly volatile international commodity prices. This chapter will explore the role of the wheat-producing Commonwealth of Independent States (CIS) countries in the volatility of international wheat prices. Studies of the connection between CIS wheat trade and international price volatility have predominantly focused on export restraints imposed by these countries between 2006 and 2011. We explore the literature on export restraints and price volatility, noting the short- and long-run effects of restraints. We also go beyond export restraints as a source of international price instability, pointing to two further potential sources of price volatility: production volatility and growing state intervention in grain markets in the wheat-producing CIS countries. Production volatility is caused mostly by weather variation and other agronomic factors. Such volatility has an understandable scientific basis, and can be controlled by the use of more inputs and better agronomic practices. Political border interventions aimed at limiting grain exports are of a different nature, since they are highly unpredictable. In this respect they are akin to the increased state measures, aimed at ‘stabilising’ and exerting state control over grain markets observed in the CIS wheat sector since 2001. Taken together, these policies do not bode well for the stability of grain prices in the future.

Keywords

Winter Wheat Food Price Production Volatility Price Volatility Political Intervention 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.
This is a preview of subscription content, log in to check access.

References

  1. Azarieva, J. (2014). Grain and power in Russia 2001–2011. (Doctoral thesis, Hebrew University of Jerusalem, Israel).Google Scholar
  2. Brown, N., Laffan, J., Wight, M. (2008). High food prices, food security and the international trading system, paper presented at the Informal National Food Pricing Summit, Sydney, 29–30 September 2008.Google Scholar
  3. Brümmer, B., Zorya, S. (2005). Wheat/flour price transmission and agricultural policies in Ukraine: A Markov-switching vector error correction approach, paper presented at the 11th Congress of the EAAE (European Association of Agricultural Economists), Copenhagen, Denmark, 23–27 August 2005.Google Scholar
  4. Chapko I, Sedik D (1998) The Ukrainian wheat market in 1997: Poltava oblast case study, CPER Occasional Papers, Iowa State University.Google Scholar
  5. Dollive, K. (2008). The impact of export restraints on rising grain prices, Working Paper No 2008-09-A, US International Trade Commission, Office of Economics. http://www.usitc.gov/publications/332/EC200809A.pdf
  6. Evdokimova, N. (2011). Marketing interventions on the grain market, All-Russian Nikonov Institute of Agrarian Problems and Informatics. http://www.viapi.ru/publication/e-biblio/detail.php?IBLOCK_ID=45&SECTION_ID=1069&ELEMENT_ID=30605
  7. Evenett, S. (2013). What restraint? Five years of G20 pledges on trade, 14th GTA Report, Centre for Economic Policy Research. http://www.globaltradealert.org/sites/default/files/GTA14_0.pdf.
  8. Federal State Statistics Service (Russian Federation). (2009). Agriculture, hunting and forestry in Russia 2009. Moscow: Federal State Statistics Service.Google Scholar
  9. Federal State Statistics Service (Russian Federation). (2011). Agriculture, hunting and forestry in Russia 2011. Moscow: Federal State Statistics Service.Google Scholar
  10. Federal State Statistics Service (Russian Federation). (2013). Agriculture, hunting and forestry in Russia 2013. Moscow: Federal State Statistics Service.Google Scholar
  11. Food and Agriculture Organization of the United Nations fertilizer use database (FAO-FERTISTAT). (2014). http://www.fao.org/ag/agp/fertistat/.
  12. Food and Agriculture Organization of the United Nations statistical database (FAO-FAOSTAT). (2014). http://faostat3.fao.org/home/E.
  13. Food and Agriculture Organization of the United Nations (FAO-GIEWS). (2014). GIEWS country policy monitoring main food-related policy measures (from 1 Jan 2008 to 11 Oct 2011). http://www.fao.org/giews/countrybrief/.
  14. Gotz, L., Glauben, T., & Brummer, B. (2013). Wheat export restrictions and domestic market effects in Russia and Ukraine during the food crisis. Food Policy, 38, 214–226.CrossRefGoogle Scholar
  15. Headey, D. (2011). Rethinking the global food crisis: The role of trade shocks. Food Policy, 36, 136–146.CrossRefGoogle Scholar
  16. Interstate Statistical Committee of the Commonwealth of Independent States (CISSTAT). (2010). Official statistics of the countries of the Commonwealth of Independent States (2010–15) (CD-ROM).Google Scholar
  17. Kim, J. (2010). Recent trends in export restrictions, OECD Trade Policy Papers, No. 101, OECD Publishing.  10.1787/5kmbjx63sl27-en.
  18. Kobuta, I., Sikachyna, O., & Zhygadlo, V. (2012). Wheat export economy in Ukraine (Vol. Policy Studies on Rural Transition No 2012–4). Budapest: FAO Regional Office for Europe and Central Asia. http://www.fao.org/docrep/017/aq344e/aq344e.pdf.Google Scholar
  19. Moscow Times. (2010, 3 September). Medvedev warns speculators after food prices rise.Google Scholar
  20. OECD/Food and Agriculture Organization of the UN (OECD/FAO). (2015). OECD-FAO agricultural outlook 2015. Paris: OECD Publishing.Google Scholar
  21. Oshakbaev, R. (2012). The grain export economy in Kazakhstan: Wheat export outlook and analysis, Policy Studies on Rural Transition No 2012–6. Budapest: FAO Regional Office for Europe and Central Asia. http://www.fao.org/fileadmin/user_upload/Europe/documents/Publications/Policy_Stdies/Kazakhstan_ru.pdf.Google Scholar
  22. Prakash, A. (2011). Why volatility matters. In: A. Prakash (ed.), Safeguarding food security in volatile global markets. Rome: Food and Agriculture Organization of the United Nations (FAO).Google Scholar
  23. Reynolds, M., Pietragalla, J., & Braun, H. (2008). International symposium on wheat yield potential: Challenges to international wheat breeding. Veracruz El Batan, Mexico: CIMMYT.Google Scholar
  24. Serova, E, (2000). Russia. In: A. Valdes (ed.) Agricultural support policies in transition economies, World Bank Technical Paper No 470, Washington, DC: World Bank. http://www-wds.worldbank.org/servlet/WDSContentServer/WDSP/IB/2000/08/14/000094946_00072405371430/Rendered/PDF/multi_page.pdf.
  25. Sharma, R. (2011). Food export restrictions: Review of the 2007–2010 experience and considerations for disciplining restrictive measures, FAO Commodity and Trade Policy Research Working Paper No 32, Rome. http://www.fao.org/fileadmin/templates/est/PUBLICATIONS/Comm_Working_Papers/EST-WP32.pdf
  26. State Statistics Service of Ukraine. (2010). Application of mineral and organic fertilisers for crops in 2009. Statistical Bulletin, Kiev.Google Scholar
  27. State Statistics Service of Ukraine. (2012). Application of mineral and organic fertilisers for crops in 2011. Statistical Bulletin, Kiev.Google Scholar
  28. State Statistics Service of Ukraine. (2013). Application of mineral and organic fertilisers for crops in 2012. Statistical Bulletin, KievGoogle Scholar
  29. State Statistics Service of Ukraine. (2014). Application of mineral and organic fertilisers for crops in 2013. Statistical Bulletin, Kiev.Google Scholar
  30. Welton, G. (2011). The impact of Russia’s 2010 grain export ban. Oxfam Research Reports, Oxfam International. https://www.oxfam.org/sites/www.oxfam.org/files/rr-impact-russias-grain-export-ban-280611-en.pdf
  31. Wolf, H. (2005). Volatility: Definitions and consequences. In J. Aizenman & B. Pinto (Eds.), Managing economic volatility and crises: A practitioner’s guide. Cambridge: Cambridge University Press.Google Scholar
  32. World Bank. (2008). Competitive agriculture or state control: Ukraine’s response to the global food crisis, Europe and Central Asia Region, Sustainable Development Unit Report No 44984-UA, World Bank. http://siteresources.worldbank.org/INTUKRAINE/Resources/WorldFoodCrisisandRoleofUkraine.pdf

Copyright information

© Springer International Publishing Switzerland 2017

Authors and Affiliations

  1. 1.Food and Agriculture Organization of the United NationsBudapestHungary

Personalised recommendations