Transmission of World Food Price Changes to Markets in Sub-Saharan Africa
- Staple food prices in these countries rose 63 percent between mid-2007 and mid-2008, about three-quarters of the proportional increase in world prices.
- Statistical analysis over 5 to 10 years indicates a long-term relationship with world prices in only 13 of the 62 African food prices examined. African rice prices are more closely linked to world markets than are maize prices.
- The global food crisis was unusual in influencing African food prices, probably because of the size of the increase and the fact that it coincided with oil price increases. Policy responses and local factors exacerbated the effect in some cases.
This suggests that African governments can reduce vulnerability to external food price shocks by investing in agricultural research, pursuing more predictable policies, facilitating grain trade, and promoting diversification in staples consumption. Trade-based food self-sufficiency policies will raise food prices but without necessarily reducing price volatility.