China's Role in the 2007-2008 Global Food Price Boom and Bust
The 2007-2008 agricultural commodity price boom was short-lived, just like past agricultural commodity price spikes. Grain prices doubled or even tripled from 2006 to 2008, while accompanying food prices rose sharply. But prices then fell steeply in the latter part of 2008. Some international agencies argued that the high prices in 2008 were going to persist for many years, partly because of growing food import demand in China and other parts of Asia. So this article investigates China's role in the 2007-2008 global food price boom and bust. We find that contrary to some claims, income, demand and trade growth in China cannot be blamed for the increase in global food prices in 2007-2008. In fact, in China, growth in meat consumption in the urban areas has slowed down since the 1990s and per capita urban meat consumption has been very constant since 2002. In the rural areas, per capita meat consumption has also stabilized in the last five years. China did not overreact to the 2007-2008 food price boom and one could even argue that strong government intervention in China's grain sector was a stabilizing factor in the world grain markets over the last two years. Copyright (c) 2009 The Authors. Journal compilation (c) The Agricultural Economics Society and the European Association of Agricultural Economists 2009.