Recent events in Russia, one of the largest suppliers of wheat in the world, have raised concern about the current and future price of wheat and wheat-based products. This article briefly examines the issue and determines if there is in fact cause for serious alarm.
Summary of Facts
Emergency food reserves, or strategic reserves, have received considerable attention since the 2007-08 food crisis. Since that time, many countries have either established new strategic reserve programs or scaled up their existing programs by increasing stock levels. The rationale behind these policies is that, with increasing international food price volatility, governments must be prepared to protect their most vulnerable populations from food price shocks, declining purchasing power, and famine.
Price volatility is one of the most critical economic and food security challenges facing global policymakers today. Moreover, spikes in food prices can have significant impact on incomes, markets, and nutrition worldwide. In extreme cases, food price volatility can have serious political and social repercussions; in the 2007-08 food price crisis, 33 countries saw violent riots and social unrest as a result of volatile food prices, while in 2011, food price spikes have been at least partially blamed for political turnover in Tunisia and Egypt, as well as riots in several other countries.
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