Table 1: Selection of studies aimed at investigating fundamental drivers for food price spikes.

Potential driverEconomic rationaleReferences

Supply side factors

Shocks in productionProduction shortfalls caused by adverse weather conditions result in lower levels of global supply and stocks[32]
Energy and fertilizer pricesHigh input prices increase agricultural production and transportation costs[3, 4, 33]
Export policiesSome of the net exporting countries introduced restrictive trade policies aimed at isolating their economies and controlling the pass-through mechanism[4]
Low level of global inventoriesA consequence of production shortfalls and political decisions[34, 35]
Neglected investment in R&D and infrastructureA limit to the growth in agricultural productivity[33]

Demand side factors

Emerging economies and structural change in global demandEconomic growth in BRIC raises individual welfare as well as urban population with a consequent shift in consumption patterns towards an increasing global demand for superior agricultural products. Effect on food prices is indirect via demand for crude oil[36]
High oil pricesReduction in price advantage of fossil fuels relative to biofuels and consequent increase in demand for competitive renewable energies[33]
Global biofuels productionIncrease in demand for crops used as input factors in biofuels production; driving prices of other crops through substitution effects in food utilization and through competition in the use of agricultural land[3, 33, 34, 36, 37]
Import policiesSome of the importing countries lift import restrictions and taxes in order to alleviate domestic consumption; no decrease in aggregated global trade despite food inflation[34, 37]

Macroeconomic factors and market conditions

Depreciation of USDOn the international level grains are traded in USD; due to the USD’s depreciation price increases less in other countries’ currencies relative to U.S. prices and import remained constant[3, 4, 33]
Inelastic marketsDue to prevailing market conditions neither supply nor demand responded to price incentives; no expansion of supply or reduction of global demand[37]