scholarly journals Market integration and price transmission in Ethiopian banana supply chain

2020 ◽  
Author(s):  
Zewdie Habte Shikur
Keyword(s):  
Supply Chain ◽  
Granger Causality ◽  
Market Integration ◽  
Geographic Distance ◽  
Price Transmission ◽  
Transport Costs ◽  
Wholesale Market ◽  
Market Prices ◽  
Long Run ◽  
Banana Market

Abstract Local banana market prices in surplus areas are asymmetrically integrated and transmitted with that in central banana market prices or deficit areas due to geographic distance between markets, market power, and high transportation costs. As the result, the banana marketing margin is high due to high transport costs and transaction costs. Although the policy relevance of degree of vertical and spatial price transmission in banana supply chain, in Ethiopia is largely unknown, and this study assists to bridge the existing gap. The study investigates degree of spatial and vertical market integration and price transmission of banana supply chain in Ethiopia. ARDL co-integration bound tests and Granger causality tests are employed to examine vertical and horizontal price transmissions in banana supply chain using 10 years average monthly banana prices. The study finds relatively a higher degree of price transmission from central wholesale banana market to surplus banana market. Central wholesaler price has a significant effect on both banana producer and retailer prices in both long-run and short‐run. The result indicates that Granger causality is running from central wholesale market to local markets. There may be high transaction cost may reflect the vertical and spatial asymmetric price transmissions in banana supply chain. Policy interventions in banana supply chains could facilitate a faster and substantial degree of price transmission between actors in banana supply chain.

scholarly journals Market Integration and Price Transmission in the Vertical Supply Chain of Rice: An Evidence from Bangladesh

Agriculture ◽  
2020 ◽  
Vol 10 (7) ◽  
pp. 271
Author(s):  
Limon Deb ◽  
Yoonsuk Lee ◽  
Sang Hyeon Lee
Keyword(s):  
Supply Chain ◽  
Market Integration ◽  
Threshold Effect ◽  
Price Transmission ◽  
Causality Test ◽  
Threshold Autoregressive ◽  
Market Participants ◽  
Long Run ◽  
Short Run ◽  
Retail Prices

As a staple food, rice has an enormous market in Bangladesh in terms of market participants and the volume of the product. As the price of rice is always a sensitive factor for producers, poor consumers and policy makers, this paper investigates market integration and price transmission along the vertical supply chain of rice. Johansen’s test of co-integration confirmed that farm, wholesale and retail prices are co-integrated in the long-run. A causality test revealed that prices were found to be at wholesale levels for both the upstream and downstream markets. The asymmetry error correction model (ECM) has discovered short-run and long-run asymmetry in price transmission in the vertical supply chain where both producers and consumers were being affected due to positive and negative asymmetry. Threshold autoregressive (TAR) and momentum threshold autoregressive (M-TAR) models have confirmed threshold co-integration as well as threshold effect on asymmetry in price transmission. The results highlight the inevitability of policy implementations and increased public interventions to reduce asymmetry for engendering greater pricing efficiency in Bangladesh rice markets.

scholarly journals Maize Market Integration: A Case Study of Maize Marketing In Ghana

2020 ◽  
Vol 1 (4) ◽  
pp. 1-11
Author(s):  
Francis Srofenyoh
Keyword(s):  
Market Integration ◽  
Price Transmission ◽  
Small Scale ◽  
Cape Coast ◽  
Agricultural Marketing ◽  
Food And Agriculture ◽  
Alternative Livelihood ◽  
Long Run ◽  
Consumer Markets

Agricultural marketing remains a challenge; this is because a large proportion of the population is engaged in a form of small-scale agricultural production and marketing that is characterised by a multitude of constraints and market imperfections. Paramount among the constraints are limited land availability, poor physical and legal infrastructure, high transaction costs and few available and alternative livelihood support systems. For some of these constraints to be removed, there is the need for information flow. Thus, it is believed that, spatial price transmission or market integration measures, the degree to which markets at geographically separated locations share common long-run price or trade information on a homogenous commodity. Using the co-integration approach, the results of the study using either Techiman or Kumasi as the producer markets of maize, the following markets Bolga, Wa, Ho, Tamale, Mankesim, Koforidua, Accra, Cape Coast and Takoradi/Sekond (as consumer markets) shows that there is a long run price transmission relations with the consumer markets. However, Bolgatanga market is the only exception. It is recommended that the Ministry of Food and Agriculture should intensify collection and dissemination of data on maize prices to both consuming markets and producing markets. This can be enhanced by Government establishing market information centres in these markets where both traders and farmers could go for information on the price trend of the commodity in other market(s).Keywords: Co-integration; Marketing; Market Integration; Non-stationarity; stochastic process.

scholarly journals Global Financial Crisis and Islamic Capital Market Integration among 5-ASEAN Countries

2015 ◽  
Vol 2 (3) ◽  
pp. 207
Author(s):  
Ibnu Qizam ◽  
Abdul Qoyum ◽  
Misnen Ardiansyah
Keyword(s):  
Granger Causality ◽  
Capital Markets ◽  
Capital Market ◽  
Market Integration ◽  
Global Financial Crisis ◽  
Granger Causality Test ◽  
Causality Test ◽  
Long Run ◽  
Integration Test ◽  
Asean Countries

Islamic Capital Market is important part of Financial System in ASEAN countries especially in the context of AEC. The objective of this paper is to investigate interconnection long run equilibrium of Islamic Capital Market in ASEAN Countries. Using daily closing price for from September 2007 to October 2012, this study examine five Islamic Capital markets in ASEAN namely Indonesia, Malaysia, Philippines, Singapore and Thailand. This study examines on Integration among these Islamic Capital markets by relies a simple correlation test, Granger causality test and co-integration test using error correction model. This research documents some interesting finding. First, Using Johansen estimation technique, there is co-integration between the considered Islamic indices namely; Indonesia, Malaysia, Philippines, Singapore and Thailand. Second, Since the co-integration exists, granger causality test shows that there is three bi-directional causalities namely; between Malaysia Islamic Capital Market and Singapore Islamic Capital Market; between Thailand Islamic Capital Market and Singapore Islamic Capital Market; and between Singapore Islamic Capital Market and Philippines Islamic Capital Market. However, there is a unidirectional between Indonesia Islamic Market (MCIINA) and Malaysia Islamic Market (MCIMY), MCIINA and Philippines Islamic Market (MCIPhil), MCIINA and Thailand Islamic Market (MCITHAI), it implies that MCIINA affects MCIMY, MCIPhil, and MCIThai but not vice versa. Third, based on VECM suggest that all Islamic indexes are inter-related in the long run that can be explained due to the similarity of structure bring about by its stock as required by shariah in the process stock screening.

scholarly journals Evaluation of Rice Markets Integration in Bangladesh

2010 ◽  
Vol 15 (2) ◽  
pp. 77-96 ◽  
Author(s):  
Mohammad Ismail Hossain ◽  
Wim Verbeke
Keyword(s):  
Market Integration ◽  
Structural Adjustment ◽  
Agricultural Sector ◽  
Price Transmission ◽  
Long Run ◽  
Adjustment Program ◽  
Integration Test ◽  
Short Run ◽  
The Government ◽  
Market Interdependence

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.

Price Transmission along the European Food Supply Chain in Selected Northern-Southern Countries

2016 ◽  
Vol 1 (2) ◽  
pp. 31-48
Author(s):  
Wael Chouayet ◽  
Anthony Rezitis
Keyword(s):  
Supply Chain ◽  
Food Supply ◽  
Price Transmission ◽  
Food Supply Chain ◽  
Small Magnitude ◽  
Food Supply Chains ◽  
Use Of Time ◽  
Long Run ◽  
Short Run ◽  
Different Characteristics

This study intends to estimate the different characteristics of price transmission and aims to test the hypothesis of price transmission asymmetry based on agricultural, processor and consumer monthly series of price indexes from 2005 to 2012 in 8 European countries from both Southern and Northern Europe and via the use of time series as well as econometric approaches such as co-intergation and error correction models. The results obtained reveal that price transmission has very small magnitude. Indeed, just 10 to 12% of price shocks at one level are corrected in the long-run by prices at another level both downstream and upstream of the food supply chain. The results also show that prices are transmitted mutually in both directions downstream and upstream the food supply chain in the two European groups. Furthermore, they indicate that in the long-run prices are transmitted symmetrically both downstream and upstream of the food supply chains in Northern as well as in Southern Europe. Finally, in the short-run different conclusions are found depending on the region.

scholarly journals Asymmetric price transmission in the distribution channels of pork: Focusing on the effect of policy regulation of Sunday sales by hypermarkets in Korea.

2020 ◽  
Vol 66 (No. 11) ◽  
pp. 499-509
Author(s):  
Heesun Lim ◽  
Byeong-il Ahn
Keyword(s):  
Market Efficiency ◽  
Wholesale Price ◽  
Distribution Channel ◽  
Price Transmission ◽  
Wholesale Market ◽  
Market Prices ◽  
Asymmetric Price Transmission ◽  
Market Inefficiency ◽  
Traditional Market ◽  
Retail Prices

In this paper, we investigate whether there exists market inefficiency in the distribution channel of pork by estimating a developed partial adjustment model that captures the asymmetric price transmission from wholesale to retail prices. The estimation results show that market efficiency exists for the wholesale and two types of retail markets in the distributional channel of pork in Korea. The government's regulation on Sunday sales by hypermarkets plays a significant role in increasing market efficiency, forcing more competition among hypermarkets, and changing the structure of asymmetric price transmission from wholesale to traditional market prices. The results suggest that the policy goal has been achieved in the traditional market by leading to a more efficient price forming due to a lessened degree of asymmetric price transmission from the wholesale price. Although market inefficiency has been maintained in the distribution channel between wholesale market and hypermarket, the behavior of price setting by hypermarkets has not been influenced by the policy.

scholarly journals Market integration of grain legumes in India: the case of the chickpea market

2014 ◽  
Vol 10 (2) ◽  
pp. 11-29 ◽  
Author(s):  
Amarender Reddy
Keyword(s):  
Market Integration ◽  
Price Discovery ◽  
Grain Legumes ◽  
North India ◽  
Adjustment Process ◽  
Local Market ◽  
Market Prices ◽  
Domestic Markets ◽  
Long Run ◽  
Correction Terms

The present study assesses the market integration of chickpea in India from 2003 to 2010. The month end prices of chickpea for twelve markets in north India were used for the study. Out of twelve markets, only three markets are cointegrated, indicating weak integration of chickpea markets in India. However, the terminal markets located in major consuming (Delhi) and export/import locations (Dohad/Gujarat) clearly play an important role in price discovery and influences other domestic markets indicating the relevance of the import prices and large consuming centres on local market prices. Error correction terms indicate that the adjustment process from short-term disequilibrium in prices to long run price equilibrium is very slow. Overall, there is evidence of weak cointegration in the chickpea markets in North India and imports and major consuming centres are playing an important role in price discovery in domestic chickpea markets.DOI: http://dx.doi.org/10.3329/sja.v10i2.18320 SAARC J. Agri., 10(2): 11-29 (2012)

scholarly journals Empirical Detection and Quantification of Price Transmission in Endogenously Unstable Markets: The Case of the Global–Domestic Coffee Supply Chain in Papua New Guinea

2021 ◽  
Vol 13 (16) ◽  
pp. 9172
Author(s):  
Ray Huffaker ◽  
Garry Griffith ◽  
Charles Dambui ◽  
Maurizio Canavari
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Transaction Costs ◽  
Papua New Guinea ◽  
New Guinea ◽  
Global Market ◽  
Price Transmission ◽  
Detection Methods ◽  
Long Run ◽  
Spatial Arbitrage

Price transmission through global–domestic agricultural supply chains is a fundamental indicator of domestic market efficiency and producer welfare. Conventional price-transmission econometrics test for a theory-based spatial-arbitrage restriction that long-run equilibrium prices in spatially distinct markets differ by no more than transaction costs. The conventional approach is ill-equipped to test for price transmission when endogenously unstable markets do not equilibrate due to systematic arbitrage-frustrating frictions including financial and institutional transaction costs and biophysical constraints. We propose a novel empirical framework using price data to test for market stability and price transmission along international-domestic supply chains incorporating nonlinear time series analysis and recently emerging causal-detection methods from empirical nonlinear dynamics. We apply the framework to map-out and quantify price transmission through the global-exporter–processor–producer coffee supply chain in Papua, New Guinea. We find empirical evidence of upstream price transmission from the global market to domestic exporters and processors, but not through to producers.

scholarly journals PRICE TRANSMISSION OF SKIM MILK POWDER IN INDONESIA: DO SKIM MILK POWDER IMPORT PRICES FOLLOW THE PRICES IN NEW ZEALAND?

2014 ◽  
Vol 4 (2) ◽  
pp. 171-192
Author(s):  
Venty Fitriany Nurunisa ◽  
Bonar Marulitua Sinaga ◽  
Ratna Winandi ◽  
Bernhard Brummer
Keyword(s):  
New Zealand ◽  
Market Integration ◽  
Milk Powder ◽  
Skim Milk ◽  
Skim Milk Powder ◽  
Price Transmission ◽  
Vector Error Correction ◽  
Long Run ◽  
Augmented Dickey Fuller ◽  
Johansen Cointegration Test

The objectives of this research are i) to examine New Zealand's dairy sector and ii) to analyze the market integration and price transmission of Skim Milk Powder (SMP) of New Zealand and Indonesian market. The methods used are Augmented Dickey Fuller test, Johansen Cointegration test, and Vector Error Correction Model. The result indicates: 1) as trade partner, New Zealand is powerful due to its status as the largest dairy producer worldwide; therefore, Indonesia has less bargaining power and 2) The SMP market of both countries are integrated. The coefficient of long run equation variable indicates that every 10 percent changes of one market, the imported SMP price will adjust 10.97 percent, while the exported SMP price will adjust 9.12 percent. The loading vector coefficient indicates that Indonesia is the only party adjusting to long run disequilibrium. Policies to minimize the risks includes: i) buffer budget, ii) alternative suppliers and iii) futures trade.

scholarly journals Price transmission analysis between Finnish and selected European broiler markets

2008 ◽  
pp. 1-7
Author(s):  
Xing Liu
Keyword(s):  
Market Integration ◽  
Wholesale Price ◽  
Market Price ◽  
Price Transmission ◽  
Poultry Meat ◽  
Agricultural Commodity ◽  
Member States ◽  
Eu Countries ◽  
Long Run ◽  
Antitrust Legislation

The import of poultry meat in Finland has been growing since 2000, mostly in broiler. Because of the avian flu scare, there has been a ban on importing poultry from Asia for the past two years, so Finland imported broiler mostly from European 25 countries, such as Denmark, Germany and France. The market share of broiler from foreign countries is growing, so is the competition on the price. Allowing for price signals to be transmitted spatially in different markets and market integration is the key premises in economics. One of the main goals of the EU’s common agricultural policy is to get spatially integrated agricultural commodity markets within and between all member states. In an integrated market, price information should be efficiently transmitted between the member states. EU commission claims that also domestic policies and regulations applied in the member countries, should support (or at least not to distort) the goal of achieving the informational efficient single European market. Particularly in Finland, with small and remote domestic market, the issue of market efficiency and transmission of market information have significant implications for the first is actions taken in accordance of the antitrust legislation on regulating the domestic food industry structures. The second is permission for domestic agricultural subsidy programs that supplement the CAP. The main purpose of the paper is to estimate the price transmission relationship between the Finnish broiler market and selected its major exporting partners using the wholesale prices, i.e. the prices in front of the slaughterhouses in each countries. The result implies that the price level of Finnish broiler market is rather stable in comparison to the most of other EU countries, and the domestic demand and supply mostly decide the wholesale price in Finland. Finnish broiler price is not cointegrated with the price of the selected countries, indicating that there is no significant long-run relationship between them. The findings show, however, the unidirectional causality between Finnish broiler price and the prices in the other EU countries in the short run. That is, the broiler price shock of Finland appears to be driven partly by the prices of imported countries, but the reverse is not true.

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