Analysis Of Price Transmission Along The Agri-Food Chains In Romania

The paper investigates price transmission along the agri-food chains, using the monthly series of agricultural, processor and consumer price indices in the period January 2006 – August 2010 for this purpose. The analysis is made at sectoral level and it is particularized for a few important chains, such as the wheat and bakery products chain and the chain of meat and meat products. The main characteristic of price transmission by chains, as revealed by the data series analysis, is the apparent stability of consumer and processor prices and the strong volatility of agricultural prices. Hence, the agricultural prices and the consumer prices follow different evolutions: consumer prices have a much lower volatility and generally a constant growth trend, while the agricultural prices have strong fluctuations, both on the medium term and on seasonal term. This remark is true both for the crop products and for the animal products. The consumer prices and the processor prices attenuate and level off the excessive variations of agricultural prices. Another conclusion of the paper is that the transmission of agricultural price variation in the period of agricultural crisis, which in Romania was manifested in the period March 2007 – May 2008, had an asymmetric character, i.e. the increase of agricultural prices was almost simultaneously accompanied by the increase of processor and consumer prices (attenuated transmission amplitude). On the contrary, in the period of agricultural price decrease, which followed after the month of May 2008, the processor and consumer prices continued to increase slowly, or stagnated in the best case, while the prices of crop products (mainly cereals) experienced significant decrease.