High instability of Wheat Production
on Global food Markets in the 2000s
Yuji MASUTOMI1, Kiyoshi Takahashi2,Tom Osborne3, and Tim Wheeler4
1: College of Agriculture, Ibaraki University
2: National Institute for Environmental Studies
3: Asia Risk Center
4: Walker Institute, University of ReadingIntroduction• Food production instability in exporting
countries can affect food security in importing
countries, expecilly in developing countries,
via volatility of price in global food market.
In 2007, the price rose from 100 yen to 150
yen due to the poor harvest of wheat inAustralia
Production instability in Australia
attacked my food security.
“Haiji-no-shiropan”

Key questions• Q1: Was the wheat productivity in exporting
countries in the 2000s particularly unstablefrom a long term perspective?
• Q2: If so, how did it happen?

Q1: Was the wheat productivity inexporting countries in the 2000s
particularly unstable from a longterm perspective?

Method• Definition: Instability– Square of the coefficient of variance(C.V.)
451
𝐼 𝑌𝑠, 𝑌𝑒 ≡ 𝐶𝑉 𝑌𝑠, 𝑌𝑒 * =/𝑌𝑒 − 𝑌𝑠 + 1

67 8 49

Ya: actual yield
Yt: trend yield𝑌𝑎 𝑦𝑟 − 𝑌𝑡 𝑦𝑟
𝑌𝑡 𝑦𝑟*296297

Fig. 1

298

Result• The299
production instability had decreased from the 1960s
to the 1990s
300• However,it suddenly increased in the 2000s and went up
to the levels in the 1960s
301

Fig. 2

Q1: Was the wheat productivity inexporting countries in the 2000s
particularly unstable from a longterm perspective?
A1: Yes.

Q2: How did it happen?

Instability of each year

• Extreme declines occurred more frequently in the1960s and the 2000s

6

Which countries had poor production
Fig. 3in the 2000s?

789• Australia had poor productivity in 2002, 2006, and 2007.

Q2: How did it happen?
A2：Poor production in Australia in
2002, 2006, and 2007
Q2’:Is the poor productivity in Australia
only reason for the high instability in the2000s?

Why do I have such a question…
• Production instability in individual countries is
not necessary condition for overall production
instability– e.g. two countries with high instability and negative
correlation cause stability in overall production.
– e.g. small instability of two countries with highcorrelation cause large instability in overall production• Don’t we have to pay attention to correlation between
exporting counties?
– We want to know the contribution of correlation
instability to overall instability.

214
214

215
215

1!"!!!!"
!"
∗∗ !
!"
,∗…
…!
(5) !"!! !"!!!!!!!
! !", !"!! !",! =!"! !!==!!!"!
!"!"!",!"!"
!"
!
!"
,(5)
!
!
−+!"!
− !!"!
!!"! ++ !1!1!1!"!
−!!"!
!"!!!!"!!!!!
!"!!!!" !!!!!
214!"!!!!"

215, … (5)!!!!!

Methodwhere the right side of expression (5) can be partitioned into the squared term

whereof(5) can bepartitioned
where thethe rightrightsideof expression
expression
216 side
Iind(Ys,Ye)and the interaction
termIint(Ys,Ye).into the squared term

• To quantify correaltion instability, we decompose
216
the216 Iind(Ys,Ye)
Iind(Ys,Ye) andandthe interaction
interaction term
term Iint(Ys,Ye).
217
e the rightside ofexpression instability(5) can be partitioned
into the squared t
overall
production
into two parts:

217
217

! !", !" ! = !!"#$ !", !" ! + !!"#$ !", !" . … (6)– Individual InstabilityYs,Ye) and the interaction
term
Iint(Ys,Ye).
218 !! !",!",!"!" !!== !!"#$!!"#$ !", !" ! + !!"#$ !", !" . … (6)– Correlation Instability

218
218

219
219

220
220

219

Iind and Iint can be estimated as follows:220
individual
Iind andand Iint
Iint cancan bebe estimatedestimated asas follows:
follows:
IindCorrelation!"!
! !", !" ! = !!"#$ !", !"!
+!!"#$!", !" .!… (6) !
1!"#$ !", !" ! ≡ !

!"! − !!"! + !1!"!"!
!

!"!!"!!!

!"! !"!"!!"∗ !! !", … (7)

!!!

!
!
11!
!
!"#$!",!"!
≡!
!"!"
∗!
!"
,, …
!
!
!"!"
∗!
!"
… (7)
(7)
!"#$ !", !" ! ≡ ! !"!!"#$!",+!"!1 ! ≡!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
!
!
−!!"!
!"! − !!"! + !1 !"!!" !!!

!"!!!
!
2 follows:nd Iint canbeestimatedas!"#$ !", !" ! ≡!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
!" !" ∗ !" !" ∗ ! !" ∗ ! !"!"#$ !", !" ! ≡!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
!
!
!
!"!– !!"! + !1

22 221!"!–!!"!
!!"! ++ !1!1!"!–

!"!"

!!!
!!!

!
!

!"!!!!"!!!!! !!!!!!!!!

!"! !"!" ∗∗ !"!"!S:!"
!"
!! !"
!"
∗∗ !
RD: (relative)deviation;marketshare!"∗∗ !
!!! !"!"
!
!
!

.. …
… (8)
(8)

!

. … (8)Iind and Iint

• Correlation was the largest in the 2000s.
• The correlation in the 2000s contributed to half of theproduction instability in the 2000s

Q2’:Is the poor productivity in Australia only
reason for the production instaibility in the 2000s?
A2’: NO!!!
Correlation instabilty contributed to half of theoverall instabiity in the 2000s

Conclusions• Wheat production in exporting countries in the 2000s
was particularly unstable.
• The instability in the 2000s was caused– not only by increase in the instability in individual countries– but also by increase in the correlation instability amongcountries.

• In other words, if the correlation instaibilty had been low
in the 2000s, the instability would not have happened.
• We should pay more attention to correlation instability
among exporting countries

Thank you for your attention!