Dec 15, 2011 Report No：11-16
What Drove the Crop Price Hikes in the Food Crisis?
In the late 2000s, the world grain markets experienced severe turbulence with rapid crop price rises caused by bad crops, oil price hikes, export restrictions, and the emergence of biofuels as well as financial speculation. We review the impacts of the first four real-side factors using a world trade computable general equilibrium model. Our simulation results show that oil and biofuels-related shocks were the major factors among these four in crop price hikes but that these real-side factors in total can explain only about 10% of the actual crop price rises.