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Market Reforms and Commodity Price Volatility: The Case of East African Coffee Market

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  • Benedicto Lukanima
  • Raymond Swaray

Abstract

type="main" xml:id="twec12124-abs-0001"> The goal of this paper is to examine the impact of commodity market reforms on producer price volatility using evidence from the East African coffee market. The results, based on time-varying volatility models and key summary statistics, show that coffee market reforms in the East African Community (EAC) are associated with changes in producer price volatility and volatility persistence at both country and regional levels. However, reforms were not the only cause of changes in price volatility. The study further shows that reforms had different effects on prices volatilities of Arabica and Robusta varieties of coffee grown in individual EAC countries. These findings have wider implication for commodity market reforms and producer price stabilisation policies in the EAC and coffee producing countries in sub-Sahara Africa.

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  • Benedicto Lukanima & Raymond Swaray, 2014. "Market Reforms and Commodity Price Volatility: The Case of East African Coffee Market," The World Economy, Wiley Blackwell, vol. 37(8), pages 1152-1185, August.
    • Handle: RePEc:bla:worlde:v:37:y:2014:i:8:p:1152-1185
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    File URL: http://hdl.handle.net/10.1111/twec.2014.37.issue-8
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    References listed on IDEAS

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    Cited by:

    1. Nsabimana, Aimable & Tirkaso, Wondmagegn Tafesse, 2019. "Examining coffee export performance in Eastern and Southern African countries: do bilateral trade relations matter?," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 59(1), July.
    2. Bernardina Algieri, 2021. "Fast & furious: Do psychological and legal factors affect commodity price volatility?," The World Economy, Wiley Blackwell, vol. 44(4), pages 980-1017, April.
    3. Tröster, Bernhard, 2015. "Global commodity chains, financial markets, and local market structures: Price risks in the coffee sector in Ethiopia," Working Papers 56, Austrian Foundation for Development Research (ÖFSE).

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