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Evaluation of Rice Markets Integration in Bangladesh

Author

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  • Mohammad Ismail Hossain

    (Department of Agricultural Economics, Faculty of Agriculture, Aristotle University of Thessaloniki, Greece.)

  • Wim Verbeke

    (Department of Agricultural Economics, Faculty of Bioscience Engineering, Ghent University, Belgium.)

Abstract

The liberalization of the agricultural sector in general and the rice subsector in particular has been a major component of Bangladesh’s structural adjustment program initiated in 1992. However, the government has continued to intervene in the rice subsector. This paper examines whether the regional/divisional rice markets have become spatially integrated following the liberalization of the rice market. Wholesale weekly coarse rice prices at six divisional levels over the period of January 2004 to November 2006 were used to test the degree of market integration in Bangladesh using co-integration analysis and a vector error correction model (VECM). The Johansen co-integration test indicated that there are at least three co-integrating vectors implying that rice markets in Bangladesh during the study period are moderately linked together and therefore the long-run equilibrium is stable. The short-run market integration as measured by the magnitude of market interdependence and the speed of price transmission between the divisional markets has been weak.

Suggested Citation

  • Mohammad Ismail Hossain & Wim Verbeke, 2010. "Evaluation of Rice Markets Integration in Bangladesh," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 15(2), pages 77-96, Jul-Dec.
    • Handle: RePEc:lje:journl:v:15:y:2010:i:2:p:77-96
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    References listed on IDEAS

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    2. Alam, Mahim & Kabir, Janesar & Rajia, Sultana & Sen, Topon, 2023. "Unveiling the Tapestry of Rice Market in Bangladesh," MPRA Paper 121993, University Library of Munich, Germany.
    3. Emran, M. Shahe & Shilpi, Forhad, 2018. "Beyond dualism: Agricultural productivity, small towns, and structural change in Bangladesh," World Development, Elsevier, vol. 107(C), pages 264-276.
    4. Md Shahinur Rahman, 2019. "Factors Affecting Price Fluctuation of Rice and Exploring the Rice Market in Barishal from the Consumer and Wholesaler Point of Views [Facteurs affectant les fluctuation de prix du riz et explorati," Working Papers halshs-02275376, HAL.
    5. Rahman, Mohammad Chhiddikur, 2020. "Welfare Impact of Asymmetric Price Transmission on Bangladesh Rice Consumers," EconStor Theses, ZBW - Leibniz Information Centre for Economics, number 242248, September.
    6. Barthelemy G. Honfoga & Gervais N’tandou-Bonzitou & Raymond S. Vodouhè & Mauricio R. Bellon & Joseph D. Hounhouigan, 2018. "Assessing the role of market integration in the consumption of traditional foods in Benin: a joint price instability coefficient and diet composition approach," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 6(1), pages 1-18, December.
    7. Talukder, Dayal & Chile, Love, 2014. "Characteristics of Rice Cultivation and Rural Rice Market in Bangladesh: Evidence from a Survey," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 15(2), pages 1-17.
    8. Mohammad Jahangir Alam & Andrew M. McKenzie & Ismat Ara Begum & Jeroen Buysse & Eric J. Wailes & Md. Abdur Rouf Sarkar & Abdullah Al Mamun & Guido Huylenbroeck, 2022. "Spatial market integration of rice in Bangladesh in the presence of transaction cost," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 10(1), pages 1-21, December.
    9. Dayal Talukder, 2014. "Agricultural Trade Liberalization and Poverty in Rural Bangladesh," Poverty & Public Policy, John Wiley & Sons, vol. 6(3), pages 282-307, September.
    10. Emran, Shahe & Shilpi, Forhad, 2018. "Agricultural Productivity, Hired Labor, Wages, and Poverty: Evidence from Bangladesh," World Development, Elsevier, vol. 109(C), pages 470-482.
    11. Adom, Philip Kofi, 2014. "Determination Of Spatial Integration And Substitution Of Foreign Rice For Local Rice In Ghana," Review of Agricultural and Applied Economics (RAAE), Faculty of Economics and Management, Slovak Agricultural University in Nitra, vol. 17(2), pages 1-16, October.
    12. Prince, Ehsanur Rauf & Barmon, Basanta Kumar & Islam, Teresa, 2022. "An Investigation into the Spatial Rice Market Integration in Bangladesh: Application of Vector Error Correction Approach," MPRA Paper 115927, University Library of Munich, Germany.
    13. Akpan, S.B. & Udoka, S. J. & Inimfon, V. P., 2016. "Assessment of Rice Market Competiveness Using Horizontal Price Transmission: Empirical Evidence from Southern Region of Nigeria," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 8(2), pages 1-16, June.
    14. Dayal Talukder & Love Chile, 2018. "Technological Innovation And Total Factor Productivity Growth Of Rice Production In Bangladesh In The Post-Liberalisation Era," Global Economic Observer, "Nicolae Titulescu" University of Bucharest, Faculty of Economic Sciences;Institute for World Economy of the Romanian Academy, vol. 6(2), pages 50-70, December.
    15. Ankamah-Yeboah, Isaac, 2012. "Spatial Price Transmission in the Regional Maize Markets in Ghana," MPRA Paper 49720, University Library of Munich, Germany.

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