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Russian market power in international wheat exports: Evidence from a residual demand elasticity analysis

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  • Uhl, Kerstin Marit
  • Perekhozhuk, Oleksandr
  • Glauben, Thomas

Abstract

Russia has emerged as a major wheat exporter since the beginning of the 2000s, and today, it possesses high market shares in several wheat-importing countries in the Middle East and North African region. This has raised concerns that Russia might abuse its dominant market position by pricing above marginal cost. Using a novel dataset with weekly information on Russian wheat exports, we apply the residual demand elasticity method to analyze the pricing behavior of Russia in its two most important export markets, i. e. Egypt and Turkey. Our estimation results reveal that Russia behaves competitively in Egypt while it exerts market power in Turkey with an estimated mark-up of 13.5 %.

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  • Uhl, Kerstin Marit & Perekhozhuk, Oleksandr & Glauben, Thomas, 2019. "Russian market power in international wheat exports: Evidence from a residual demand elasticity analysis," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 17(2), pages 1-13.
    • Handle: RePEc:zbw:espost:207165
    DOI: 10.1515/jafio-2016-0026
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    1. Gafarova, Gulmira & Perekhozhuk, Oleksandr & Glauben, Thomas, 2015. "Price Discrimination And Pricing-To-Market Behavior Of Black Sea Region Wheat Exporters," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 47(3), pages 287-316, August.
    2. Kerstin Uhl & Oleksandr Perekhozhuk & Thomas Glauben, 2016. "Price Discrimination in Russian Wheat Exports: Evidence from Firm-level Data," Journal of Agricultural Economics, Wiley Blackwell, vol. 67(3), pages 722-740, September.
    3. Mahanaseth Itthipong & Tauer Loren W., 2014. "Thailand’s Market Power in Its Rice Export Markets," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 12(1), pages 109-120, January.
    4. Mitchell, Donald, 2008. "A note on rising food prices," Policy Research Working Paper Series 4682, The World Bank.
    5. Bresnahan, Timothy F, 1981. "Duopoly Models with Consistent Conjectures," American Economic Review, American Economic Association, vol. 71(5), pages 934-945, December.
    6. Baker, Jonathan B. & Bresnahan, Timothy F., 1988. "Estimating the residual demand curve facing a single firm," International Journal of Industrial Organization, Elsevier, vol. 6(3), pages 283-300.
    7. World Bank, 2016. "World Development Indicators 2016," World Bank Publications - Books, The World Bank Group, number 23969.
    8. Zsombor Pall & Oleksandr Perekhozhuk & Ramona Teuber & Thomas Glauben, 2013. "Are Russian Wheat Exporters Able to Price Discriminate? Empirical Evidence from the Last Decade," Journal of Agricultural Economics, Wiley Blackwell, vol. 64(1), pages 177-196, February.
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    Cited by:

    1. Gulmira Gafarova & Oleksandr Perekhozhuk & Thomas Glauben, 2023. "The Oligopolistic Behavior of Kazakh and Russian Wheat Exporters in the South Caucasus: Evidence from a Residual Demand Elasticity Analysis," Journal of Industry, Competition and Trade, Springer, vol. 23(1), pages 1-32, June.
    2. Tleubayev, Alisher & Bobojonov, Ihtiyor & Götz, Linde, 2022. "Agricultural policies and technical efficiency of wheat production in Kazakhstan and Russia: Evidence from a stochastic frontier approach," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 54(3), pages 407-421.

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