Food Import Dependency and National Food Security: A Price Transmission Analysis for the Wheat Sector

Abstract

Agricultural trade liberalization and protecting domestic markets encompass conflicting policy goals. Even though after the food crisis in 2008, national governments of food-deficit nations aimed at reducing food supply dependency on external markets, no research has assessed the impacts of food import reliance on price or price volatility transmissions to local markets. We constructed a dynamic conditional correlation (DCC)–generalized autoregressive conditional heteroscedasticity (GARCH) model to examine whether wheat import dependency could make a country vulnerable to overseas shocks by analyzing the inter-relationships between the international wheat price and retail wheat flour prices in 10 net importing countries over the sample period from January 2005 to December 2019. It was found that retail price volatility in each region was positively correlated with international price volatility for most of the period concerned. We also discovered that external dependency could significantly protect the domestic market from the global one, implying that lowering wheat dependency on foreign markets improves “stability” and “availability” of food security without sacrificing “utilization”, but it may aggravate “access”.

Food security management in developing countries: Influence of economic factors on their food availability and access

“…The correlation and multiple regression methods have been widely used to find the relationship between economic status and the food security indicators, applied previously to factors such as food import dependency [ 27 ], food balance, dietary data of vegetables and fruits [ 28 ], self-sufficiency [ 29 ], food price [ 30 ], wealth indices and food consumption [ 31 ]. Therefore this study considered this statistical analysis (regression model) with the four economic indicators chosen, that have not been studied before in the same model, as is considered in this study.…”

Impact of Trade Openness on Food Security: Evidence from Panel Data for Central Asian Countries

“…Food security is traditionally analyzed in terms of food self-sufficiency or food self-reliance [ 30 ]. Self-sufficiency requires domestic food consumption mainly depends on domestic production rather than imports as the main supply source, while self-reliance requires more diverse supply sources, including imports [ 30 , 31 ]. In recent years, international food trade has become an increasingly integral part of the global food supply system [ 32 ], and more countries have recognized the significance of trade openness to maintain adequate food security status [ 14 ] and are increasingly dependent on trade to maintain food security due to climate change, population growth and many other factors.…”

“…Liberalizing trade, especially in agriculture, is not conducive to unleashing agricultural production potential, considering the market competitiveness of smallholder farmers in developing economies is significantly weaker than large farmers in middle-income economies or subsidized farmers in developed economies [ 41 ]. Additionally, reducing foreign dependency on food could significantly abate the conveyance of international market shocks to indigenous markets [ 31 ]. It has also been found in some relevant literature that there was a U-shaped relationship between trade openness and food security in less developed countries (LDCs), and food security has decreased in the initial stages of trade openness expansion but increased beyond a given threshold [ 43 ].…”

Impact of Extreme Weather Disasters on China’s Barley Industry under the Background of Trade Friction—Based on the Partial Equilibrium Model

“…Due to local conflicts, economic shocks, and extreme weather disasters, 155 million people worldwide have fallen into food insecurity, threatening to trigger a global food crisis [ 1 ]. Extreme weather disasters exacerbate the vulnerability of the global food supply system with their uncertainty [ 2 , 3 ], resulting in the stagnation or decline of some global food production [ 4 ], which has become one of the biggest threats to food security in the 21st century [ 5 , 6 ]. Barley is one of the most important cereals in feed and malt production.…”