Pass-through of International Food Prices to Emerging Market Economies: A Revisit.

Sharp upturns in international food prices in 2007-08 and 2010-11 have motivated a close scrutiny of their volatility, transmission and supply chains. While global food prices have remained tame since 2012, the uptick in prices of major food groups in the second half of 2019 is expected to add to the upside risks of domestic food prices across emerging market economies (EMEs), which are already witnessing high food inflation pressures due to internal supply shock conditions. Against this backdrop, this study intends to re-examine whether global food prices hold any implications for domestic prices in EMEs which have higher shares of food in their overall consumption baskets. Using data from January 2007 to July 2019, the study finds that short-term elasticities, in the range of 0.02-0.16, are lower than long-term elasticities. Moreover, there are large cross-country divergences in long-term transmission elasticities. [ABSTRACT FROM AUTHOR]