Analysis of Hydrous Ethanol Price Competitiveness after the Implementation of the Fossil Fuel Import Price Parity Policy in Brazil

Competition is a relevant element in any open economy. Public policies are necessary to induce economic efficiency and to create conditions to preserve or stimulate a competitive environment. This paper aims to assess the competitiveness of hydrous ethanol price in a period of political, social and economic crises, in 15 Brazilian state capitals between the years 2012 and 2019. We compared the ethanol–gasoline price ratio behavior in two different periods, before and after the import parity price policy implemented by Petrobras in 2016. Mann–Whitney and Levene’s tests, two non-parametric statistical methods, were applied to verify significant changes between these periods. The implementation of changes in Petrobras’ pricing policy from 2016 onwards caused a statistically significant increase in the ratio coefficient of variation in two-thirds of the distribution market and more than the half of analyzed retail markets. Second, overall, the cities that showed statistically significant changes in the median and coefficient of variation in the distribution market price ratio were followed by the retail market. Our findings suggest that government interventions in the fuel and byproduct final selling prices to distributors negatively impact competition between companies that are part of the fuel distribution and retail chain, also affecting the sale of biofuels in Brazil and discouraging the initiatives to use renewable fuels to reduce the emission of pollutants.

The impact on the South African economy of alternative regulatory arrangements in the petroleum sector

This paper adds quantitative analysis to the study by Crompton et al. (2020), in which various alternative regulatory arrangements regarding the petrol price in South Africa were explored. We use a multi-sector dynamic computable general equilibrium model for South Africa to conduct our economic impact analysis. Five scenarios are modelled, first individually to correctly calibrate the shocks, and then cumulatively to find the overall economy-wide effects of the proposed reforms. Under the most comprehensive set of reforms to the determination of petrol prices, which seeks to emulate market forces, the South African economy is seeing substantial benefits. GDP is expected to rise by 0.67 per cent and real wages by over 1.1 per cent relative to the baseline. Refineries are assumed to shrug off reforms targeted at removing pure profits earned via the import parity price (Basic Fuel Price) methodology by accepting a slightly lower rate of return, enabling them to meet the expected increase in demand for petrol on the back of the lower consumer prices achieved via the reforms. Whilst job losses at fuel service stations may be expected as a result of reduced revenues and margins, increased activity and job opportunities in the rest of the economy, facilitated through cheaper trade and transport margins, will more than offset those losses.

Analisis Rentang Harga Gula Kristal Rafinasi Pada Pasar Lelang Komoditas Dengan Pendekatan Harga Paritas

The government has stipulated Trade Minister Regulation Number 16/M-DAG/PER/3/2017 regarding Refined Sugar Trade in Commodity Auction Market. However, the method of determining the highest and the lowest sugar price has not been arranged in the regulation. Thus, this study aims to analyze the price range of Refined Sugar in Commodity Auction Market. Import parity approach of raw sugar is utilized to calculate auction price range. The cost components are highest and lowest raw sugar price in international market as well as tolling fee for production and distribution of refined sugar. The result indicates that the estimated lowest price is between IDR 7,869/Kg and IDR 8,176/Kg and the estimated highest price is between IDR 11,527/Kg and IDR 11,742/Kg. This study recommends that import parity approach of raw sugar can be used to determine the price range of refined sugar. However, technical guidance for seller/buyer with existing sales contracts, technical team consisting representative of stakeholders to anticipate the fluctuating price issue, and the certainty of import quota for raw sugar as supply guarantee of refined sugar in action market are needed to be considered in order to support the regulation. Keywords: Refined Sugar, Auction Market, Parity Price Pemerintah menerbitkan Peraturan Menteri Perdagangan Nomor 16/M-DAG/PER/3/2017 Tentang Perdagangan Gula Kristal Rafinasi (GKR) Melalui Pasar Lelang Komoditas (PLK). Dalam regulasi dimaksud, terdapat 1 (satu) aspek dalam mekanisme lelang yang belum dicapai kesepakatan, yaitu metode penentuan Harga Batas Bawah (HBB) dan Harga Batas Atas (HBA) penjualan GKR. Untuk menganalisis besaran rentang harga lelang GKR, digunakan pendekatan paritas impor GKM dengan komponen harga GKM tertinggi dan terendah, serta biaya tolling terkait produksi dan distribusi GKR. Besaran HBB diperkirakan berada pada kisaran Rp 7.869/Kg dan Rp 8.176/Kg dan HBA sebesar Rp 11.527/Kg dan Rp 11.742/Kg. Sebagai perangkat kebijakan, pendekatan paritas impor GKM dapat digunakan untuk menentukan rentang harga GKR. Namun demikian diperlukan beberapa pertimbangan antara lain petunjuk teknis bagi peserta lelang yang sudah memiliki kontrak penjualan, dukungan tim teknis yang terdiri dari perwakilan pemangku kepentingan untuk mengantisipasi dinamika harga GKM, serta kepastian kuota impor GKM dalam menjamin supply GKR di PLK. Kata Kunci: Gula Rafinasi, Pasar Lelang, Harga Paritas

Analysing Indian G-Secs with a Predictive Approach

The bond movement being observed keenly by the business communities across the world is primarily because of the fact that large organizations require a huge sum of money which cannot be met in the form of bank loans alone. The solution is to raise money from the public by issuing bonds. It is of equal interest to the investors because bonds are fixed income securities. In this market it is imperative to understand the interplay of macroeconomic factors such as inflation levels, interest rates, foreign exchange rates, purchasing power parity, price movements, monetary and fiscal policies. The rationale behind the decision to invest in a particular bond is directly influenced by the present value of the bond. This paper aims to build a model using Panel Data Regression to predict the present value of the bonds by considering the components of the term structure such as interest rates, maturity, bond yield etc.

Import and export parity price analyses of selected vegetables and spices in Bangladesh

The study was undertaken to find out the export potentialities of selected vegetables and import substitution of selected spices in Bangladesh. Seven hundred twenty vegetables and 320 spices growers, 25 suppliers, and 25 exporters were randomly selected for the study.Net margin analysis was done on both variable and total cost basis. Domestic resource cost (DRC) analysis was also done for estimating comparative advantage of the selected vegetables and spices. The study revealed that net returns were positive for all vegetables and spices producers. However, the highest net return was estimated for brinjal producers (Tk. 273799/ha) followed by bittergourd producers (Tk152145/ha). In the case of spices, the highest net return was received by ginger producers (Tk. 231399/ha) followed by onion producers (Tk. 122308/ha).Comparatively lower net returns were found for okra (Tk51830/ha) and garlic producers (Tk 99352/ha). Vegetables exporters received the highest net margin (Tk32852/ ton) from UK market which was higher than the Middle East market (Tk22869/ton).The highest benefit cost ratio (BCR) was calculated for brinjal (1.9) followed by ash gourd (1.8). For spices, BCR were 2.1and 1.8 for ginger and garlic respectively. Bangladesh had comparative advantage for producing all selected vegetables as the estimates of domestic resource cost (DRC) were less than one. The value of DRC for all selected spices were less than unity implied that the production of these spices would be highly efficient for import substitution. Therefore, the study have been undertaken to find out this issues.Bangladesh J. Agril. Res. 42(2): 321-341, June 2017

Fuelling the economy: A critical review of liquid fuels regulation in South Africa

This article reviews the regulation of liquid fuels in South Africa over the past decade. We first briefly assess the regulatory regime and how the regulatory functions have been carried out. We then consider the influence of security of supply concerns on regulation and highlight that it has favoured local refining interests rather simply ensuring supply to local fuel customers. The record of price regulation at different levels from refinery to retail is assessed, revealing the margins which had been allowed through the way in which the import parity price calculation had been done, which set prices that were higher than actual import prices would have been. The article further highlights how regulation has failed to take into account the special position of Sasol, notwithstanding the recommendations of the Windfall Tax Task Team and the reasons why the recommendations were not adopted by National Treasury based on expectations of investment. The case of natural gas provides a contrast, being subject to a recent regulatory framework, and we consider whether learnings from regulation in other parts of the value chain have been used in setting out new regulations.

An Analysis of the Impact of Alternative Peanut Marketing Quotas and Support Prices

The first significant changes in the peanut program in more than 20 years are contained in the Food and Agricultural Act of 1977. The new program retains the use of acreage allotments, marketing quotas, and support prices but changes the procedure used to establish the size of the allotments and quotas given. The new program provides for two support prices versus one under the old program and no longer relates the support price level to a “parity price” concept.In anticipation of the changes expected to be forthcoming from the new program during 1978 and future years, an analysis was undertaken to determine the effect of changing peanut marketing quotas and support prices on producer income, peanut consumer surplus, and peanut program costs. The analysis does not focus on changes generated by the new program because specific aspects of the program were not known when the research was conducted. Rather, the effect of a change or combination of changes in marketing quotas and support prices is analyzed in a general manner. Generalizations about the new program can be made on the basis of the analysis.

The Impact of the Direct Peanut Price Support Program on Farm Income and Government Cost

Two major programs — allotment-quota and price support — have been in force to support peanut farming since 1952. The purpose is to restrict production of peanuts while supporting the price of peanuts produced. Production is restricted through the allotment-quota program, determined by the Secretary of Agriculture, and converted to a national acreage allotment. However, minimum national acreage allotment has been fixed at 1.61 million acres. The price support program provided that price be supported no lower than 75 percent of the parity price of peanuts. Under the programs, peanuts produced by the grower are sold on the market at the support price for edible uses and excess quantities are sold to the government at the support price. Peanuts purchased by the government are stored and later sold for crushing at the going market price. Because peanuts for crushing command a much lower price than the government acquisition price, the purchase-and-resale operation results in a net loss representing public cost of the peanut price support program.