Food Price Pass-Through in the Euro Area - The Role of Asymmetries and Non-Linearities

Ferrucci, Gianluigi; Jiménez‐Rodríguez, Rebeca; Onorante, Luca

doi:10.2139/ssrn.1578209

Cited by 18 publications

(9 citation statements)

References 29 publications

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“…There is a noticeable lag of about three months in the response of retail prices to changes in producer prices. This finding is consistent with to date studies showing a significant and longlasting food price pass-through in Europe (Ferrucci et al, 2010). However, as there is a large number of factors that may co-exist and impact on the process of price transmission (Lloyd, 2017), it cannot be said with certainty that retail prices have changed in response to wholesale price movements and not to other factors.…”

Section: (2) 2022supporting

confidence: 90%

“…In some cases, retail prices increased more strongly, in others -wholesale prices. Thus, although it seems clear from the literature review that the pass-through to producer prices is higher than to consumer prices and producer prices may be more volatile (e.g., Ferrucci et al, 2010), one cannot draw a firm conclusion that producer prices are more vulnerable to the COVID-19 shocks.…”

Section: (2) 2022mentioning

confidence: 99%

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European Union Agri-Food Prices During Covid-19 and Their Seleceted Determinants

Hamulczuk¹,

Skrzypczyk²

2022

Zagadnienia Ekonomiki Rolnej / Problems of Agricultural Economi

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The pandemic caused by the outbreak of the SARS-CoV-2 virus has widespread socio-economic consequences worldwide. The implications of the COVID-19 crisis also include changes in production, consumption, trade, and agri-food commodity prices. This paper focuses on the repercussions of the COVID-19 crisis on producer and retail prices of agri-food commodities in European Union (EU) countries. The study is based on monthly producer and consumer food price indices in EU countries. In estimating the impact of COVID-19 on prices, actual price changes were compared with counterfactual figures derived from ex-post forecasts calculated according to regARIMA models. The study of the causes of price changes was based on both quantitative and qualitative approaches. In the quantitative approach, the impact of the strength of applied restrictions and the trade position of countries on the deviation of actual prices from the forecasts was examined. For this purpose, regression models based on cross-sectional data were applied. The results show that there is a quite significant variation in the dynamics of changes in agri-food commodity prices both among countries and across the marketing chain. A negative and statistically significant relationship has been found between country food self-sufficiency in the pre-COVID-19 period and changes in producer prices during the first phase of the COVID-19 crisis. In turn, the strength of stay-at-home restrictions was significant for retail price formation during the COVID-19 crisis. The general conclusion is that the responses of agri-food prices during the pandemic vary both spatially and over time.

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Section: (2) 2022supporting

confidence: 90%

Section: (2) 2022mentioning

confidence: 99%

European Union Agri-Food Prices During Covid-19 and Their Seleceted Determinants

Hamulczuk¹,

Skrzypczyk²

2022

Zagadnienia Ekonomiki Rolnej / Problems of Agricultural Economi

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“…Higher biofuel demand is responsible for 30% of the increase in grain prices, with corn prices increasing the most with a 39% increase in real prices (Hochman and Rajagopal, 2014). According to Ferrucci and Jimenez-Rodriguez (2010) oil price changes have the highest pass-through to food commodities and fertilizers among non-energy commodities. High energy prices, according to Garza et al (2022) have increased the expenses of transportation and agricultural inputs such as fertilizer and pesticides, increasing the cost of agricultural output.…”

Section: Literature Reviewmentioning

confidence: 99%

Impact of Petroleum Energy Price Volatility on Commodity Prices in Ghana

Dadzie

Nambie²,

Obobi³

2023

IJEFI

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The purpose of this article is to demonstrate the relationship between petroleum energy volatility and commodity prices in Ghana, which are indexed (energy grains, meat, and cooking oil), as well as to provide an empirical specification of the impact's direction. With reference to time series literature, the paper examined energy and commodity price connection models such as augmented dickey fuller, granger causality, co-integration, vector autoregressive and the vector error correction models used in estimating the association among petroleum energy volatility and the three selected commodity variables. The paper found that, there is a long run relationship between petroleum energy volatility and commodity prices in Ghana from 2011 to 2022. A single equation error correction model suggested that, petroleum energy shocks increase prices of grains, meat and cooking oil in both the short and long run. Impulse response function and variance decomposition conducted on the variables also suggested that there is both short and long run association between the variables.

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“…Bukeviciute et al (2009) estimate that the elasticity of retail prices in relation to food firms' prices is 18% in the EU area over the period 2005-2008. This weak transmission of price changes between food firms and retailers (relative to the share of goods purchased in retailers' total costs) suggests that retailers would absorb a substantial proportion of the changes in food firms' prices by adjusting their margins (on this point, see also Ferrucci et al, 2012). Conversely, Campa and Goldberg (2006), Bonnet and Réquillart (2013) and Bonnet et al (2015) show that for some products retailers can pass on to consumers more than the variations in costs incurred.…”

Section: ❚ Imperfect Price Transmissionmentioning

confidence: 99%

Evolving the Common Agricultural Policy for Tomorrow's Challenges

Détang-Dessendre¹,

Guyomard²

2022

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Measures that are more specific complete the picture targeting specific support for certain products, production methods, or specific local conditions. Among others, some target Organic Farming (OF), young farmers, or specific investments. Other measures provide aid to farmers in less-favoured areas or aid to compensate for the additional costs of adopting more environmentally friendly practices. • The CAP and the economyThe 1992 reform of the CAP was initially a response to an external constraint to allow the successful conclusion of the multilateral agricultural negotiations of the 1994 Uruguay Round of the General Agreement on Tariffs and Trade, also known as GATT, and the compatibility of the future CAP with this agreement . The path taken at that time (that is, the decoupling of the agricultural income support policy) is the same that is followed today, even though the global context has changed markedly, with the rise of new agricultural export (Argentina, Brazil) and import (China) players; the failure of the multilateral negotiations of the Doha Round at the World Trade Organization (WTO); 4 the multiplication of bilateral trade agreements; and more recently, the unilateral setting of customs duties by certain countries in a climate of (at least latent) trade warfare. For completeness, it should also be noted that the European agricultural sector is facing new and significant economic challenges that it is struggling to meet: first, fluctuations in agricultural prices and incomes in an EU that is less protected by customs duties today than it was previously (even if these remain significant for several products and non-tariff protection still exists); and second, difficulties in creating value in the context of a saturated domestic food market and in distributing the value created in a balanced way between the different actors of the production, processing, and distribution chains.The economic aspects of the CAP and European agriculture are the subject of the first part of this book. Following a brief history of the CAP from its origins to the present day in Chapter 1, Chapter 2 deals with the question of the dependence of farm incomes on CAP support, and Chapter 3 examines agricultural employment dynamics. Chapter 4 covers trade aspects and the competitiveness of European agriculture on the international scene. Chapter 5 examines the distribution of value, and Chapter 6 discusses the crisis and risk management instruments.

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Food Price Pass-Through in the Euro Area - The Role of Asymmetries and Non-Linearities

Cited by 18 publications

References 29 publications

European Union Agri-Food Prices During Covid-19 and Their Seleceted Determinants

European Union Agri-Food Prices During Covid-19 and Their Seleceted Determinants

Impact of Petroleum Energy Price Volatility on Commodity Prices in Ghana

Evolving the Common Agricultural Policy for Tomorrow's Challenges

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