Food security and global security - IEEE

José María SumpsiThe volatility of the agricultural markets and the world food crisisfell to their lowest levels in the last 25 years (graphs 1 and 2). In the opinion of manyexperts, this constitutes the primary cause for the sharp increase in agriculturalprices in 2007 and the first half of 2008. In fact the level of stocks plays a key rolein balancing the markets and in mitigating the oscillations in international agriculturalprices. If the level of stocks is low in relation to total use, the markets have greatdifficulty in absorbing a sudden shock in supply or demand, and therefore any dropin supply due to natural disasters and/or adverse climate conditions,or increases in demand, will provoke a sharp increase in agricultural prices, as wasthe case in 2007 and 2008. In fact, as can be seen in the following graph, thestock-to-use ratio for the main cereals fell to its lowest values in the last 25 years.Figure 1 – Stocks to utilization ratio for wheat (1979/80-2007/08)147Source: FAO 2008 bFigure 2. Stocks to utilization ratio for maize (1979/80-2007/08)Source: 2008 b