scholarly journals International Market Integration and Competitiveness of Indian Sugar

2021 ◽  
pp. 097215092098864
Author(s):  
A. N. Vijayakumar ◽  
David Bozward
Keyword(s):  
Market Integration ◽  
International Markets ◽  
Price Transmission ◽  
Vector Error Correction ◽  
Domestic Markets ◽  
Vector Error ◽  
The Us ◽  
The World ◽  
Sugar Market ◽  
Great Energy

Globalization and liberalization policies facilitated national and international commodity markets to integrate with each other. This integration facilitated price transmission and market efficiency of commodities at domestic markets, leading traders across the globe to exploit opportunities. India is one of the vibrant and emerging economies in the world absorbing these economic features and integrating its markets with the world. This article, focusing on the Indian sugar market, explores market integration of sugar prices with the US, UK and global average prices and also contributes a policy dimension to enhance the competitiveness of the Indian sugar sector. The article, using Johansen’s co-integration with a vector error correction model (VECM), finds the existence of market integration of Indian sugar prices with international prices. However, the average Indian sugar prices are higher than those in other markets, with the support of government price protection policies. These higher prices motivated to increase sugar production in the country. The lower cane prices of Brazil, Australia and Thailand pose challenges in international markets for Indian sugar. Despite this, the Indian sugar sector has a competitive advantage in becoming a great energy source by focusing on ethanol production, which would lead to reducing its international dependency for oil supplies. In addition, the sector can also contribute to rural socio-economic development through adopting technology to produce other by-products rather than merely concentrating on sugar.

scholarly journals Leading properties of GDT auctions for dairy prices

2020 ◽  
Vol 122 (7) ◽  
pp. 2303-2328
Author(s):  
Jakub Olipra
Keyword(s):  
Milk Powder ◽  
Price Transmission ◽  
Price Expectations ◽  
Content Type ◽  
Vector Error Correction ◽  
Vector Error ◽  
Setting Process ◽  
Dairy Markets ◽  
The Us ◽  
Vector Error Correction Models

PurposeProfessionals from the dairy sector commonly believe that the results of Global Dairy Trade (GDT) auctions are a good leading indicator for prices of dairy commodities. The purpose of this paper is to test that hypothesis for prices of key dairy commodities (skimmed milk powder (SMP), whole milk powder (WMP), butter and cheddar) in the main dairy markets (the US, EU and Oceania).Design/methodology/approachThe leading properties of the GDT auctions are investigated using vector error correction models (VECM).FindingsThe results show that prices at GDT auctions may be treated as a benchmark for global prices of WMP and SMP as they affect prices in all considered markets. However, in case of EU market the relationship with the GDT is bidirectional. GDT prices reveal some leading properties also in cheddar market, however price relationships in this market are much more complex. In case of butter market, GDT can be regarded as a benchmark only for Oceania.Practical implicationsThe results of this paper improve knowledge on price transmission in dairy markets, show the role of the GDT auctions in the price setting process, and thus may help professionals from the dairy sector to formulate their price expectations more precisely.Originality/valueDespite the fact that many professionals from the dairy sector treat GDT auctions as a benchmark, so far their leading properties have not been scientifically proven.

scholarly journals Seasonal Soybean Price Transmission between the U.S. and Brazil Using the Seasonal Regime-Dependent Vector Error Correction Model

2019 ◽  
Vol 11 (19) ◽  
pp. 5315
Author(s):  
Byung Min Soon ◽  
Jarrett Whistance
Keyword(s):  
Price Transmission ◽  
Seasonal Effects ◽  
Vector Error Correction Model ◽  
Correction Model ◽  
Vector Error Correction ◽  
Vector Error ◽  
The World ◽  
Soybean Price ◽  
Dependent Vector ◽  
The U.S

Soybean production and trade in the U.S. and Brazil are seasonal. Our research question is whether the seasonal tendencies cause the price relationship between U.S. and Brazilian soybean prices. Therefore, the objective is to test for seasonality in the price transmission between the U.S. and Brazil soybean prices using the seasonal regime-dependent vector error correction model (VECM). Our results show that the speed of the adjustment for the U.S. soybean price in the first half of the year is greater than the speed of the adjustment for the Brazilian soybean price. However, the pattern of their responses becomes the reverse in the second half of the year. The component share calculated by the result of the VECM with seasonal effects indicates that the U.S. dominates the world soybean market during the second half of the year while Brazil is dominant in the soybean market in the first half of the year. These results give us an important finding that we could not find using the VECM without seasonal effects. Finally, our results imply that the seasonal pattern of production in the U.S. and Brazil could cause the sustainability of the supply chain in the world soybean market.

scholarly journals Price Behaviour and Market Integration: Preliminary Evidence from the Ukrainian and European Union Rapeseed Markets

2019 ◽  
Vol 19(34) (1) ◽  
pp. 47-58 ◽  
Author(s):  
Mariusz Hamulczuk ◽  
Oksana Makarchuk ◽  
Edgardo Sica
Keyword(s):  
European Union ◽  
Market Integration ◽  
Preliminary Evidence ◽  
Price Transmission ◽  
The European Union ◽  
Correction Model ◽  
Vector Error Correction ◽  
Vector Error ◽  
Trade Analysis ◽  
Price Analysis

This paper aims to provide preliminary evidence about the existence of horizontal integration between the rapeseed markets in Ukraine (UA) and the European Union (EU). To this end, both a trade analysis and a price analysis were carried out. In particular, the trade analysis was performed using yearly trade flows between the UA and EU, whereas price co-movement was assessed by means of linear vector error correction model (VECM) applied to weekly prices for rapeseed from 2008 to 2018. Our findings provide evidence of strong integration between the UA and EU markets in terms of the trade of rapeseeds, rape cake, and rape oil, as well as high horizontal rapeseed price transmission between the two economies.

AN ANALYSIS OF ASIAN MARKET INTEGRATION PRE- AND POST-CRISIS

2006 ◽  
Vol 09 (04) ◽  
pp. 483-501 ◽  
Author(s):  
T. J. BRAILSFORD ◽  
J. H. W. PENM ◽  
R. D. TERRELL
Keyword(s):  
Market Integration ◽  
Global Markets ◽  
Vector Error Correction ◽  
Vector Error ◽  
The Us ◽  
Before And After ◽  
Base Cluster ◽  
Asian Currency Crisis ◽  
The Uk ◽  
Market Relations

In this paper cointegrating relations between six East and Southeast Asian markets relative to a base cluster of three global markets are investigated in the framework of zero-non-zero (ZNZ) patterned vector error-correction modelling (VECM). The analysis focuses upon market relations both before and after the Asian currency crisis. The strength of integration between markets is also evaluated by extending Geweke's measurement approach within this framework. The results show that, since the crisis, estimated integration strengths have become more powerful between the Asian and global markets, with the US market leading both the Asian markets and the markets of Japan and the UK.

Asymmetric Price Transmission along the European Food Supply Chain and the CAP Health Check: a Panel Vector Error Correction Approach

2018 ◽  
Vol 17 (2) ◽  
Author(s):  
Anthony N. Rezitis ◽  
Andreas Rokopanos
Keyword(s):  
Supply Chain ◽  
Error Correction ◽  
Food Supply ◽  
Health Check ◽  
Transmission Mechanism ◽  
Price Transmission ◽  
Estimation Methods ◽  
Food Supply Chain ◽  
Vector Error Correction ◽  
Vector Error

Abstract The 2003 CAP Reform commenced a liberal shift on the policies designed to protect farmers across Europe. The CAP Health Check of 2008 and the 2013 CAP Reform confirmed this change, adopting measures including the further decoupling of production, the abolishment of set-aside and the phasing-out of milk quotas. It is therefore expected that price transmission has been affected radically. This study investigates the price transmission mechanism along the European food supply chain, based on an asymmetric panel vector error correction model (VECM). Panel data on agricultural commodity (farmer), producer (processor) and consumer (retailer) prices from nineteen European countries are considered. The sample is split into two sub-periods, before and after the CAP Health Check, to examine how the price transmission mechanism has been affected. Cointegration is confirmed among the price series through the Pedroni tests and the long-run relationship is obtained with two estimation methods (i. e. fully modified OLS and dynamic OLS). Prior to the CAP Health Check, positive asymmetry is detected from farmer to processor and from processor to retailer. However, after the CAP Health Check price transmission becomes symmetric, thus suggesting that decreased support has resulted in a more efficient price transmission mechanism.

Afghanistan’s Food Security: Evidence from Pakistan and Afghanistan Wheat Price Transmission using Threshold Vector Error Correction Model (TVECM))

2021 ◽  
Vol 5 (1) ◽  
pp. 1-16
Author(s):  
Tahir Mahmood ◽  
Afaq Ali Muluk ◽  
Seema Zubair
Keyword(s):  
Food Security ◽  
Wheat Flour ◽  
Market Price ◽  
Price Transmission ◽  
Wheat Grain ◽  
Correction Model ◽  
Vector Error Correction ◽  
Vector Error ◽  
Long Run ◽  
Wheat Market

Afghanistan's food security mainly depends on Pakistan's wheat prospect, circumstances, agriculture policies, and market price dynamics. This study explores the price transmission mechanism of the wheat flour and wheat grain between Pakistan and Afghanistan using monthly price pairs from January 2003 through October 2017. The paper investigates the existing knowledge of how Pakistan’s agricultural policy and wheat market affects the wheat market and food security of Afghanistan. The results confirm that the wheat flour price of Pakistan is found to be driving the price of wheat flour of Afghanistan. This implies that wheat flour price of Pakistan evolves independently, and that wheat flour price of Afghanistan balances any divergence in the long-run relationship between the two markets prices. The policy implication is to eradicate transaction costs as well as procuring timely wheat grain and flour, in order to maintain price stability between Pakistan and Afghanistan wheat markets.

scholarly journals ANALISIS INTEGRASI PASAR SPASIAL KOMODITI PANGAN ANTAR PROVINSI DI INDONESIA

2018 ◽  
Vol 3 (2) ◽  
pp. 136-157
Author(s):  
Arnanto Arnanto ◽  
Sri Hartoyo ◽  
Wiwiek Rindayati
Keyword(s):  
Market Integration ◽  
Market Failure ◽  
Food Prices ◽  
Price Transmission ◽  
Pricing Policy ◽  
Sugar Market ◽  
Retail Prices ◽  
Food Market ◽  
Integrated Or ◽  
Integration Analysis

Food prices stabilization through the food production and trade to fulfillment consumption in terms of both availability and accessibility food is government major problem. Government’s ability to determine an appropriate pricing policy depends on market structure, behavior and effectiveness. Trade barriers and market failure reduction, improved access information would make market integration effective and efficient. This study aims to analyze the market integration and the price transmission elasticity that occurs between regions in Indonesia. Using Ravallion integration analysis and a span from 2009 to 2013 on 33 provinces retail prices data in Indonesia to capture level integration and price transmission between regions. The results showed in the rice shows that Jakarta and South Sulawesi region is becoming the leading market and Jakarta for sugar market those integrated with most areas in Indonesia. Sugar and rice have a better degree of integration than soya. Integration analysis with Ravallion models cannot explain two areas integrated or not. It is necessary to study towards further for East Java in terms of either regional autonomy policy or any market failure that occurs in order to find a policy solution to be more integrated. Key words : Food, Market integration, Ravallion model

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