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Price Sensitivity on the Global Wheat Market

Author

Listed:
  • Łopaciuk Wiesław

    (Wiesław Łopaciuk, PhD, Institute of Agricultural and Food Economics National Research Institute, Department of Agricultural Markets and Quantitative Methods; ul. Świętokrzyska 20, 00-002 Warsaw, Poland)

  • Rembisz Włodzimierz

    (PhD, DSc, ProfTit, Institute of Agricultural and Food Economics National Research Institute, Department of Agricultural Markets and Quantitative Methods; ul. Świętokrzyska 20, 00-002 Warsaw, Poland)

Abstract

This article concerns the issue of price sensitivity on the global wheat market, understood as the ratio of the change in prices to the change in the volume of harvests and stocks as supply variables. This sensitivity was investigated using a model approach, applying it to the market as a whole and to exporting and importing countries. To capture the essence of this sensitivity, a simplifying assumption was made about demand as an a priori given variable. The results of the study indicate that with large amplitudes of changes in both the volume of harvests and stocks as well as price levels, the level of price sensitivity, i.e., how prices react in percentage terms to a 1% change in harvests and stocks, is relatively low. At the same time, this sensitivity is greater for harvests than for stocks. The aim of the study is to present general trends in the price sensitivity coefficient. The period of empirical analysis covers almost 60 years. The results of the study are of both cognitive and utilitarian significance, in particular for methods of prediction and forecasting of the market situation and for agricultural policy formulation. It is also a politically important issue at the moment.

Suggested Citation

  • Łopaciuk Wiesław & Rembisz Włodzimierz, 2024. "Price Sensitivity on the Global Wheat Market," Zagadnienia Ekonomiki Rolnej / Problems of Agricultural Economics, Sciendo, vol. 380(3), pages 66-89.
    • Handle: RePEc:vrs:zerpae:v:380:y:2024:i:3:p:66-89:n:1004
    DOI: 10.30858/zer-190894
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    More about this item

    Keywords

    price sensitivity; market microeconomics; wheat market; price changes;
    All these keywords.

    JEL classification:

    • Q02 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Commodity Market
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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