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Underlying Trends and International Price Transmission of Agricultural Commodities

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Abstract

This paper examines the extent to which increases in international food prices during the past few years have been transmitted to domestic prices in selected Asian developing countries. In analyzing the historical data, evidence on price transmission for important food commodities such as rice, wheat, and edible oil have been considered. The price transmission elasticity has been estimated using regression models coupled with recent econometric techniques such as unit root tests and error correction models with threshold adjustment. Finally, the paper draws some policy implications from the empirical results. This study provides the numerical estimates on the empirical relationship between international prices and domestic prices. The analysis uses commodity-specific monthly data rather than annual data during a period of substantial policy reforms in order to understand both long-run and short-run relationships between world and domestic prices.

Suggested Citation

  • Ghoshray, Atanu, 2011. "Underlying Trends and International Price Transmission of Agricultural Commodities," ADB Economics Working Paper Series 257, Asian Development Bank.
  • Handle: RePEc:ris:adbewp:0257
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    Cited by:

    1. Ronald Kabbiri & Manoj Dora & Gabriel Elepu & Xavier Gellynck, 2016. "A Global Perspective of Food Market Integration: A Review," Agrekon, Taylor & Francis Journals, vol. 55(1-2), pages 62-80, June.
    2. Olipra, Jakub, 2020. "Price transmission in (de)regulated agricultural markets," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 59(4), October.
    3. Jin Guo & Tetsuji Tanaka, 2020. "The Effectiveness of Self-Sufficiency Policy: International Price Transmissions in Beef Markets," Sustainability, MDPI, vol. 12(15), pages 1-23, July.
    4. Bekkers, Eddy & Brockmeier, Martina & Francois, Joseph & Yang, Fan, 2017. "Local Food Prices and International Price Transmission," World Development, Elsevier, vol. 96(C), pages 216-230.
    5. Hassanzoy, Najibullah & Ito, Shoichi & Isoda, Hiroshi & Amekawa, Yuichiro, 2016. "The Effects Of Swings In Global Wheat Prices On The Domestic Markets In Afghanistan," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 4(4), pages 1-14, October.
    6. World Bank Group, 2014. "Myanmar : Rice Price Reduction and Poverty Reduction," World Bank Publications - Reports 21119, The World Bank Group.
    7. Harold Glenn A. Valera & Mark J. Holmes & Valerien O. Pede & Jean Balié, 2023. "How convergent are rice export prices in the international market?," Agricultural Economics, International Association of Agricultural Economists, vol. 54(1), pages 127-141, January.
    8. Hassanzoy, Najibullah & Ito, Shoichi & Isoda, Hiroshi, 2015. "Global To Domestic Price Transmission Between The Segmented Cereals Markets: A Study Of Afghan Rice Markets," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 3(4), pages 1-16, October.
    9. 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.
    10. Tetsuji Tanaka & Jin Guo, 2020. "International price volatility transmission and structural change: a market connectivity analysis in the beef sector," Palgrave Communications, Palgrave Macmillan, vol. 7(1), pages 1-13, December.
    11. repec:ags:ijag24:346854 is not listed on IDEAS
    12. John, Adam, 2013. "Price relations between export and domestic rice markets in Thailand," Food Policy, Elsevier, vol. 42(C), pages 48-57.
    13. Kabbiri, Ronald & Dora, Manoj & Elepu, Gabriel & Gellynck, Xavier, 2016. "A Global Perspective of Food Market Integration: A Review," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 55(1-2), May.
    14. Philly Ramoroka & Chiedza L. Muchopa, 2022. "Inter-commodity Price Transmission between Maize and Wheat in South Africa," International Journal of Economics and Financial Issues, Econjournals, vol. 12(5), pages 57-63, September.
    15. Elina Bryngemark & Patrik Söderholm, 2022. "Green industrial policies and domestic production of biofuels: an econometric analysis of OECD countries," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 24(2), pages 225-261, April.
    16. Gotz, Linde & Qiu, Feng & Gervais, Jean-Philippe & Glauben, Thomas, 2012. "Export Restrictions And Multiple Spatial Price Equilibria When International Prices Spike: Export Quotas For Wheat In Ukraine," 2012: New Rules of Trade? December 2012, San Diego, California 143179, International Agricultural Trade Research Consortium.

    More about this item

    Keywords

    Global commodity crises; International food prices; Domestic food prices; Price transmission; Commodity price trends; Agricultural commodities;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices

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