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36 CHAPTER 2


Figure 2.13 Global trends in wheat stocks-to-use ratios Stocks to production ratio (percent)


40


30 35


20 25


15 10 5


0 Source: Calculations by the authors using data from USDA (2008c).


extremely high stock levels (70 percent of use in the 1990s) and has quite rationally reduced them. Indian and Pakistani stocks have also decreased to what may seem like perilously low levels, although there are caveats in these cases as well. Pakistan (unlike India) tends to export a large proportion of its rice production (chiefly the Basmati variety), whereas in India stocks came down from inefficiently high levels and were still well above the long- term norm during the recent food crisis (Gulati and Dutta 2009). Wheat stock declines in India reflect poor harvests that resulted in that country engaging in unusually large imports in 2006 (6 million tons). Indeed, it was actually its recent experience with wheat shortages that prompted the Indian govern- ment to restrict non-Basmati rice exports in November 2007, as well as a surge in demand for Indian rice exports, possibly because of substitution effects from the ensuing crisis in international wheat markets (Headey 2010). In other major exporting countries the stocks story is even less compel- ling. Stocks have actually almost doubled in the world’s largest rice-exporting country (Thailand) and have been rising quickly in another leading exporting country (Vietnam). Thus stocks do not look like an important factor in deter- mining rice prices, except insofar as they contributed to India’s rice export ban, which did have a big impact on surging prices beginning in late 2007.


1970–74: large stock declines in rest of world because of U.S. export to USSR and China


World World excluding China and USSR


2004–08: more moderate stock declines in rest of the world


1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008


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