Abstract

Over the last decade, the use of foodstuffs such as corn, wheat and soybean in biofuels production has been growing sharply in the United States, Canada and Europe. This growth has increased total demand for agricultural commodities and stimulated agricultural prices. However, corn, rice, wheat and soybean are the most important sources of calorific energy for West African Economic and Monetary Union (WAEMU) member states’ population, and WAEMU countries are highly dependent on the imports of these products. Consequently, rising prices can have an important impact on imports and severe consequences on food security in these developing countries. This paper aims to investigate: (i) the short-term and long-term relationships between the prices of corn, rice, wheat, soybean and oil and their volatilities, and (ii) the effects of these agricultural commodities prices shocks on the imports of each WAEMU member states. The Autoregressive Distributed Lag (ARDL) model, the Multivariate Generalized Autoregressive Conditional Heteroskedasticity (MGARCH) model and the Granger causality test are used in this investigation. The results show that imports of agricultural commodities in WAEMU countries are highly and significantly sensitive to price changes in international market. In short term as well as in long term, there is a significant relationship between the prices of these products. We find a positive relationship in general between prices volatilities, and negative effects of price volatility on imports. Thus, distortions in world agricultural markets threaten considerably food security in WAEMU countries, especially access to food for vulnerable and low-income populations. Policy makers must adopt viable strategies to increase agricultural production and limit their dependence on imports.

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