The restrictions imposed by agriculture producing countries on the export of food grains have caused an estimated over $50bn over the last four to five years.
Due to the controls on food exports, the wheat importing countries must have caused an extra payment of $21.5bn and rice importing countries must have paid at least an additional $19bn after the producing countries imposed restrictions on the exports.
A document (World Trade Agenda 2013) released at the 8th edition of World Chambers Congress that calculated the contribution of food export controls to the rising price of food grain, estimated that food export controls boosted the world price of rice by 57 percent and the global price of wheat by 33 percent during the past four to five years.
The international price of maize (corn) grew by 8 percent. Wheat is by far the most affected commodity, and that export controls have bigger impact on the food grain.
The disclosure assumes significance to some GCC countries like Qatar as they currently meets 70 to 80 percent of its food requirements through imports. Qatar's consumption is projected to grow by 6.3 percent from 1.5m tons in 2011 to 1.9m tons in 2015.
The total GCC food import bill is expected to touch $53.1bn by 2020, an increase of 105 percent from 2010's $25.8bn.
According to the document released at the ICC World Trade Agenda Summit of the World Chambers Congress, the year 2011 serves as a baseline year for estimating the near-term consequences of food export controls.
"In 2011, world imports of maize, rice and wheat were 98m metric tons (mmt), 35mmt, and 148mmt respectively. Cost to importing countries of future food export controls lasting two years are estimated by multiplying the world imports of each commodity by the world price increases delivered by the 2006-2008 controls.
These calculations show that the 8 percent increase in the maize price experienced in 2006-2008 would cost consumers approximately $4.5bn over two years.; the 51 percent increase in the world rice price would cost consumers approximately $19bn; and the 23 percent increase in the world wheat price would cost consumers $21.5bn.
In aggregate terms , the price increases in 2006-2008, if repeated over a two year period, would translate to a total cost of $45.5bn for food importing countries", the document noted.
Based on this calculation, if food export controls are imposed only in periods of spiking prices, their cost to importing countries would be episodic, but quite significant. This underlines the need for better discipline on food controls.
In the realm of merchandise trade, probably no segment faced more intervention than agriculture. In recent years, many countries have restricted food exports due to drought. During 2006-2008, over 20 countries controlled their food exports. In aggregate these countries account for a third of world exports of agricultural commodities.
"When one country stabilizes domestic food prices and enhance availability through trade controls, it "exports" rising prices and scarcity to the world market. Consumer in food importing countries thereby suffers," the document noted.