Market Risk in Rice
In preparation for the FARMD Annual Conference: Risk & Rice in Asia, a series of articles and newsletters on production, market, and enabling environment risk in rice was launched. This second edition, on Market Risk in Rice, contains articles, links, resources, news and information to help conference attendees and the FARMD Community better understand the issues that were discussed during the two-day Annual Conference.
Market risk in rice is a major issue globally, particularly for the developing world. As rice is the staple food for more than one-fifth of the world population, volatility in rice markets, and fluctuations in rice prices can cause significant impacts for the poor around the world.
Rice Market Risk: Insights from Côte d’Ivoire | Ralitza Dimova and Patrick Monnet Gbakou, University of Manchester and University of Cocody-AbidjanDr. Dimova and Dr. Gbakou share in this article the experience of rice markets in Côte d’Ivoire, particularly since the rise of global food prices by approximately 50% between April 2007 and March 2008 stimulated heated academic and policy debate on the welfare implications of price risk. They share their reserach on the welfare implications of rice price changes across quintiles in the Côte d’Ivoire's welfare distribution and separately for predominantly food producing Northern regions in the country and predominantly cash crop producing Southern regions in the country. |
Articles
Market Risk in Indian Agriculture - A Case of Rice | Ramesh Chand and S S Raju, National Centre for Agricultural Economics and Policy Research (ICAR), New Delhi, India
In a country like India, where more than 60 per cent of the area under cultivation is not irrigated, farm production is highly vulnerable to fluctuations in rainfall. Beside production risk Indian farmers also face high market risk. Farm harvest prices in the country show high inter and intra year volatility. Price variation is quite pronounced in the regions and commodities where price support mechanism is not operative. With increased commercialization of agriculture, price fluctuations have become highly significant in affecting farmers’ income. Accordingly, market risk is also now quite important in affecting farmers’ income.
Potential Risk Management Benefits of Rice Futures Markets for developing countries – lessons from the US | Professor Andrew McKenzie, University of Arkansas.
Professor Mckenzie discusses futures markets as a potential risk management strategy for price risks facing developing countires. Using the case of the United States rice futures markets, Professor McKenzie highlights explains what futures markets are, the econcomic benefits of them, and lessons learned from the US rice futures market.
Additional Resources
Video
News Video Network (August 2012) | Thailand's governing Pheu Thai party won last year's election partly based on a promise to improve the income of rice farmers. The government introduced a scheme which currently pays them around 50 to 60 per cent more than market prices. The International Monetary Fund estimates that this could amount to $3.8bn, excluding the cost of storage. Despite the cost, the government says it will continue with the programme, because it has a duty to look after farmers. But not everyone agrees that the benefits are worth it. Al Jazeera's Florence Looi reports from Bangkok. Watch Now
CargoHandbook.com Rice Section | As a cereal grain, rice is the most important staple food for a large part of the world's human population, especially in Asia and the West Indies. It is the grain with the second-highest worldwide production, after maize (corn). Since a large portion of maize crops are grown for purposes other than human consumption, rice is the most important grain with regard to human nutrition and caloric intake, providing more than one fifth of the calories consumed worldwide by the human species. Therefore we have extended the article on rice to a transport guidance, in order to prevent loss as much as possible.
FAO Rice Market Monitor | The FAO Rice Market Monitor (RMM) provides an analysis of the most recent developments in the global rice market, including a short-term outlook. Presently, the full document is available only in English but highlights are available in Spanish and French.
USDA Economic Research Service Rice Market Outlook | The Economic Research Service (ERS) conducts a variety of market outlook activities on the rice industry. Details on major changes and events in the world rice market are published monthly in Rice Outlook (previously published outlook reports are also available). An annual report provides a recap of the previous market year.