Model closure and price formation under switching grain market regimes in South Africa

Meyer, Ferdinand; Westhoff, Patrick C.; Binfield, Julian; Kirsten, Johann F.

doi:10.1080/03031853.2006.9523753

Cited by 17 publications

(17 citation statements)

References 4 publications

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“…The demand block consists of human consumption, feed utilization and amount retained for seed, and ending stocks. Figure 2 Meyer et al (2006) price formation for a commodity when a country is in an autarky trade regime.…”

Section: Concept Of Partial Equilibrium Modellingmentioning

confidence: 99%

The impact of production shocks on maize markets in Ethiopia: implications for regional trade and food security

2020

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In this article, we demonstrated the dynamic impact of a bumper harvest and drought shocks on the maize market and on the trade regime in Ethiopia. Regional market integration of Ethiopia's white maize market with the South Sudan and Kenyan maize markets was also examined using cointegration analysis. Despite the renewed conflict in South Sudan, Addis Ababa maize market is cointegrated with Juba's maize market. The simulation analysis indicated that a 20% increase in maize yield could reduce the maize price by 81%. This implies a decrease in the maize price level of 70% (110 USD/t) below the export parity price. This makes maize exports profitable and shifts the trade regime from autarky to an export parity regime. On the other hand, the effect of a drought could increase maize prices by 61% in the short run (within the year). At the current market price, the domestic maize price is wandering between the border prices and it is unprofitable to export maize. Therefore, lifting the export ban, even during normal harvest seasons, would not do any harm to the domestic maize price.

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Section: Concept Of Partial Equilibrium Modellingmentioning

confidence: 99%

The impact of production shocks on maize markets in Ethiopia: implications for regional trade and food security

2020

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“…It is expected that the prices of maize in South Africa shift between three regimes as discussed in Meyer et al. (). These are: Import parity: The import parity price is the world price of a commodity plus transport and tariff costs.…”

Section: Applicationmentioning

confidence: 99%

The transmission of world maize price to South African maize market: a threshold cointegration approach

Abidoye

Labuschagne

2013

Agricultural Economics

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This paper seeks to provide an explanation for the relationship between domestic maize price in South Africa and world maize prices in order to evaluate co-movement and transmission of world prices to domestic prices in Sub-Sahara African countries. This is done by comparing nested and non-nested models that capture different forms of nonlinearity in the price spread. Adopting a Bayesian approach that allows for comparison of models using Bayes Factor, we found that the relationship between South African price and world price for maize indicates the presence of nonlinearity in price transmission with three regimes that is triggered by the price spread in previous period.JEL Codes: C5, C11, Q0, Q13, Q18

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“…Econometric modelling has proven to be effective in facilitating an understanding of change at the sector level. Examples of such models in relevant South African literature include Meyer (2002), Meyer, Westhoff, Binfield and Kirsten (2006), and Cutts, Reynolds, Vink and Meyer (2007). However, these models can only simulate the impact of changes in markets, policies and other factors at the sector level, not at the farm level.…”

Section: Introductionmentioning

confidence: 99%

Facilitating decision-making in agriculture by using a system of models

Strauss

Meyer

Kirsten

2008

Agrekon

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This article presents a deterministic farm-level model developed to link to an existing partial equilibrium sector-level model of the grain and livestock sectors of South Africa. The objective is to create a linked system of models consisting of a sector-and farm-level model with the capability to analyse the likely effects of changes in policies and markets at both the sector and representative farm level in South Africa. A representative farm in the Free State Province is used to validate the farm-level model. The farm-level model is used to simulate a baseline as well as two scenarios of the representative farm for the period 2003 to 2010. Results indicate that the farm-level model simulates the representative farm rather accurately compared to historical data. The baseline and scenario results indicate that the linked system of models can be useful for policy and business decision-makers to analyse the impact of change in policies and markets at both the sector-and farm level.

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Model closure and price formation under switching grain market regimes in South Africa

Cited by 17 publications

References 4 publications

The impact of production shocks on maize markets in Ethiopia: implications for regional trade and food security

The impact of production shocks on maize markets in Ethiopia: implications for regional trade and food security

The transmission of world maize price to South African maize market: a threshold cointegration approach

Facilitating decision-making in agriculture by using a system of models

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