The effects of trade liberalisation on high food prices would most likely be minimal. The
potential impacts on global supplies are small, of the order of plus or minus two per cent.
On the other hand, trade liberalisation has an important role to play in smoothing out
price fluctuations caused by domestic supply shocks, caused by drought, floods or frost.
It is not surprising that the recent spike in commodity prices was most evident in the rice
market, which is very thin, with less than five per cent of production traded
internationally. Thinning the market even further through the use of export controls was
an understandable response, yet it only exacerbated the problem.