Publication

This paper analyzes the causes of rising food commodities prices. It discusses the role played by structural idiosyncratic and macroeconomic factors such as the depreciation of the dollar and the reduction of US interest rates after mid-June 2007. The author also examines how governments have been coping with inflationary pressures and under which circumstances putting a wedge between international and domestic prices may or may not be appropriate. Finally, the author assesses the potential impact of higher food commodities prices on poverty and whether governments in developing countries are sufficiently equipped to cope.