World Wheat Markets

Considering the Background of High Wheat Prices and its Relation with Regional Economic Integration

Abstract

  This paper reviews the development of soaring food prices in 2006-2008 world food price crisis. In particular, it focuses upon high wheat prices from a short-term perspective with the attention upon how it has occurred since the late 2006 and also upon its background from a long-term perspective through looking at the effects of agriculture and trade policies of the past in China and India on the current level of world wheat stocks. And it suggests that international policy dialogue be strengthen on agricultural and trade policies of each country in terms of international food security in order to keep the appropriate level of world food stocks. At the same time, it proposes that the international release system of emergency food stocks and its international cost sharing system be established in the near future. Furthermore, it observes the changes in wheat export structures of EU and United States after the market integration of EU and the conclusion of NAFTA in the early 1990s. Since the market integration, their wheat export structures have become focused on EU members and Latin America, especially Mexico, which raise concern about the uneven distribution of agricultural trade goods and its relationship with high food prices in world food crisis. At the end of this paper, it illustrates the fragile nature of food security in Egypt as an example of a food importing country during the poor harvest in agricultural exporting countries and compares it with the situation in Japan.