Local Food Prices and International Price Transmission

Bekkers, Eddy; Brockmeier, Martina; François, Joseph; Yang, Fan

doi:10.1016/j.worlddev.2017.03.008

Cited by 65 publications

(53 citation statements)

References 30 publications

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“…While the overall trend in recent years is a gradual increase of domestic maize trade integration in SSA, price transmission across countries and from the international market follows a different dynamic. Systematic inquiries of world food prices pass through found weak integration of global markets with domestic SSA grain economies, dominated by local supply shocks and sluggish price adjustments (Baquedano and Liefert, ; Bekkers et al., ; Kalkuhl, ; Minot, ; Rapsomanikis and Mugera, ). Meta‐regressions from Kouyaté and Cramon‐Taubadel () suggest that borders significantly reduce the likelihood of cointegration, especially for maize markets.…”

Section: Maize Market Integration In Sub‐saharan Africamentioning

confidence: 99%

Cross country maize market linkages in Africa: integration and price transmission across local and global markets

Pierre

Kaminski

2018

Agricultural Economics

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In order to study short-run price shock propagation, we model twenty seven Sub-Saharan Africa (SSA) domestic maize markets within a Global Vector Autoregression framework. The main purpose is to fully embed multilateral trade flows as a way to better structure local price transmission dynamics and interdependencies, and get a more comprehensive picture of food price shocks propagation. We found significant between-country market contagion and prompt regional price shock propagation when trade connection exists. Yet, the integration of SSA domestic maize markets within the continent and with global markets remains generally weak. Furthermore, under regular market conditions, most local price series appear to be more responsive to regional neighbors than to global shocks.JEL classifications: C13, C15, C32, Q10, Q11

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Section: Maize Market Integration In Sub‐saharan Africamentioning

confidence: 99%

Cross country maize market linkages in Africa: integration and price transmission across local and global markets

Pierre

Kaminski

2018

Agricultural Economics

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“…Farmers, especially those engaged in export agriculture, therefore have been shown to often receive less benefits than in a case where exchange rates better reflect market conditions. 16 While exchange rate policies can have important impacts on the agricultural sector and rural areas more broadly, it has also been shown that changes in exchange rates to local prices are incomplete, especially so in developing countries (Campa and Goldberg 2005;Borensztein and Queijo Von Heideken 2016;Bekkers et al 2017). The reasons for this limited pass-through are often not well understood.…”

Section: Resultsmentioning

confidence: 99%

Trade, value chains, and rent distribution with foreign exchange controls: Coffee exports in Ethiopia

Tamru¹,

Minten²,

Swinnen³

2019

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Exchange rate policies can have important implications on incentives for export agriculture. However, their effects are often not well understood. We study the issue of foreign exchange controls and pricing in the value chain for Ethiopia's coffee-its most important export crop. Relying on unique pricing and cost data, we find that coffee exporters are willing to incur losses during exporting by offering high prices for coffee locally in order to access scarce foreign exchange. The losses in export markets are then more than recovered in importing, indicating rents-import parity prices are significantly lower than the prices charged for imported goods, so that profits on imports are much higher than the losses incurred in exporting. We further show that the high coffee wholesale prices are transmitted to farmers, so that they benefit from the rents downstream. These results suggest that a better exchange rate alignment to reduce the overvaluation of the local currency in this case would have a lower impact on export crop producer prices than typically is anticipated.

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“…Prices constitute the basic economic category, that is why they constitute the subject of numerous analyses (Fackler and Goodwin, 2001;Valiante and Egenhofer, 2013;Bekkers, Brockmeier, Francois and Yang, 2017;Thalassinos and Pociovalisteanu, 2007). One of interesting directions of research in this area refers to their transmission (Bekkers et al, 2017;Greb, Jamora, Mengel, Cramon-Taubadel, Wurriehausen, 2016;Rembeza and Seremak-Bulge, 2009). Under this direction of research, the subject of interest is usually constituted by the processes of transmission of price impulses, directions of their flow, and disturbances in transmission processes.…”

Section: Literature Reviewmentioning

confidence: 99%

Price Linkages Between Tea Markets: A Case Study for Colombo, Kolkata and Mombasa Auctions

Rembeza¹,

Radlińska²

2020

ERSJ

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Purpose: This paper aims to identify the price linkages among the three largest auction tea markets in Colombo (Sri Lanka), Kolkata (India), and Mombasa (Kenya). The hypothesis about the existence of long-term price linkages between markets was verified and the rate of short-term price reactions to exogenous price shocks on particular markets has been defined. Design/Methodology/Approach: Due to a diverse level of integration of particular variables, ARDL models were applied in the analyses. The bounds test was applied to test long-term price linkages. Short-term adjustment were described based on the restricted Error Correction Models. Findings: The obtained results indicated that market linkages were mainly long-term. Shortterm price linkages among markets were poor. The Colombo market had the largest number of price maker features, but the Kolkata market behaved more like a price taker. The article analyzes average prices of tea in the individual markets. Price differences do not include the tea class quality. Practical Implications: The results indicate that price information on other markets is primarily relevant for long-term decisions. In short-term decisions, information on tea prices on other markets is of relatively small importance. Originality/Value: The indication of central markets is important for market participants. It is difficult to determine a priori whether and if so which markets are the most important in the price setting process. The obtained results indicate that the Colombo market was the leading market in the long term. In the short term, price information on other markets was primarily relevant for the Kolkata market.

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Local Food Prices and International Price Transmission

Cited by 65 publications

References 30 publications

Cross country maize market linkages in Africa: integration and price transmission across local and global markets

Cross country maize market linkages in Africa: integration and price transmission across local and global markets

Trade, value chains, and rent distribution with foreign exchange controls: Coffee exports in Ethiopia

Price Linkages Between Tea Markets: A Case Study for Colombo, Kolkata and Mombasa Auctions

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