Scandinavian Working Papers in Economics
Working Papers in Economics,
University of Gothenburg, Department of Economics
No 607: Importing High Food Prices by Exporting: Rice Prices in Lao PDR
Dick Durevall () and Roy van der Weide ()
Additional contact information
Dick Durevall: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: P.O. Box 640, SE 40530 Gothenburg, Sweden
Roy van der Weide: Development Economics Research Group, The World Bank, Washington DC, The United States
Abstract: This paper shows how a developing country, Lao PDR, imports high glutinous rice prices by exporting its staple food to neighboring countries, Vietnam and Thailand. Lao PDR has extensive export controls on rice, generating a sizable difference between domestic and international prices. Controls are relaxed after good harvests, leading to a surge in exports early in the season and rapidly rising prices later in the year. There is thus a strong case for removal of trade restrictions since they give rise to price spikes, keep the long-term price of glutinous rice low, and thereby hinder increases in income from agriculture. Although this is a case study of Lao PDR, the findings may equally apply to other developing countries that export their staple food.
Keywords: exports; food prices; free trade; rice prices; rice markets; sticky rice; welfare
39 pages, November 2014
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