Research Reports
Impacts and Policies of New Changes in the World Grain Market
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AuthorKim, Yongtaek
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Publication Date2007.12.01
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Original
The World is focussing on the impact of the rapid increases of some grains such as corn, wheat, and soybean in the international market on the world economy. The representative example is the aginflation phenomenon which is a compound word of agriculture and inflation. In particular, Korea as the fifth country of grain import in the world should know the current situation, forecast, and impact of higher grain prices. Also she should prepare for better strategies to minimize bad effects of higher international grain prices.
The direct reason of higher international grain prices is the increase of grain demand for bio-fuel which leads to the competition between the demand for food and demand for energy. Therefore, the trend of combing the food security with the energy security makes the structure of grain supply and demand more complex.
If the grain market structure changes from a circular structure like a business cycle to a chronic extra demand structure, the strategies for securing international grains should be established. The objective of this study, thus, are as follows,
1) to find out the current situation of international grain prices,
2) to forecast the international grain prices,
3) to investigate the impact of higher grain prices on the domestic economy, and
4) to design the strategies to alleviate the negative effects to the livestock industry and the food industry.
The ways of minimizing the negative effects of higher grain prices are the establishment of the early warning system, the expansion of the future market for grains, and the active policy support for setting up the foreign agricultural development import system.
Researchers: KIM, Yong-Taek and Bae-Sung KIM
E-mail: Yongkim@krei.re.kr
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