Assistant Professor, Evans School of Public Affairs, University of Washington
Director of Policy and Research, Oxfam America
IDRC Research Fellow, Center for Global Development
Senior Fellow, Center for Global Development
It is widely believed that oil prices impact food prices in developing countries. Yet evidence on this relationship is scarce. Using maize and petrol price data from east Africa we show that global oil prices do affect food prices, but primarily through transport costs, rather than through biofuel or production cost channels. For inland markets, world oil prices have larger effects on local maize prices than do world maize prices. Furthermore, oil price shocks transmit much more rapidly than maize price shocks, suggesting that policies to assist food insecure households during correlated commodity price spikes should consider transport cost effects.
How and by how much do global crude oil price shocks affect local food prices, particularly in countries with high levels of subsistence food production? Brian Dillon will present his paper “Global Oil Prices and Local Food Prices: Evidence from East Africa”, which tackles that important question, focusing on maize markets in the four major east African economies: Ethiopia, Kenya, Tanzania and Uganda.