The global hunger indices of 2008 and 2009 (Grebmer et al. 2008, 2009) point to persistently high levels of hunger and food insecurity and a worsening of the situation due to rising crop prices. At the same time, there is a lack of empirical knowledge on the demand- and supply-side determinants...

We analyse a stylized model of the world grain market characterized by a small oligopoly of traders with market power on both the supply and demand side. Crops are stochastic and exporting countries can impose export tariffs to protect domestic food prices. Our first result is that export...