Price Discovery in the South African White and Yellow Maize Futures Market

Muroyiwa, Brian; Mushunje, Abbyssinia

doi:10.21506/j.ponte.2017.8.41

Cited by 4 publications

(3 citation statements)

References 19 publications

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“…However, despite this seemingly negligible contribution towards the country's economy, the agricultural sector accounts for almost 10 percent of the total employment in the country and about one-third of the country's total crop production is exported with considerable financial returns [10]. In addition, more than a million people in the country are indirectly dependent on the agricultural sector for their livelihood [11] and 94 percent of the agricultural products such as wheat, maize, and rice are consumed within the country [12]. The strategic importance of the agricultural sector in South Africa is therefore evident.…”

Section: Introductionmentioning

confidence: 99%

Impact of Climate Change on Crop Production and Potential Adaptive Measures in the Olifants Catchment, South Africa

Olabanji

Ndarana

Davis

2020

Climate

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Climate change is expected to substantially reduce future crop yields in South Africa, thus affecting food security and livelihood. Adaptation strategies need to be implemented to mitigate the effect of climate change-induced yield losses. In this paper, we used the WEAP-MABIA model, driven by six CORDEX climate change data for representative concentration pathways (RCPs) 4.5 and 8.5, to quantify the effect of climate change on several key crops, namely maize, soya beans, dry beans, and sunflower, in the Olifants catchment. The study further investigated climate change adaptation such as the effects of changing planting dates with the application of full irrigation, rainwater harvesting, deficit irrigation method, and the application of efficient irrigation devices on reducing the impact of climate change on crop production. The results show that average monthly temperature is expected to increase by 1 °C to 5 °C while a reduction in precipitation ranging between 2.5% to 58.7% is projected for both RCP 4.5 and RCP 8.5 relative to the baseline climate for 1976–2005, respectively. The results also reveal that increased temperature and decreased precipitation during planting seasons are expected to increase crop water requirements. A steady decline in crop yield ranging between 19–65%, 11–38%, 16–42%, and 5–30% for maize, soya beans, dry beans, and sunflower, respectively, is also projected under both RCPs climate change scenarios. The study concludes that adaptation measures such as the integration of changing planting dates with full irrigation application and the use of rainwater harvest will help improve current and future crop production under the impact of climate change.

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Section: Introductionmentioning

confidence: 99%

Impact of Climate Change on Crop Production and Potential Adaptive Measures in the Olifants Catchment, South Africa

Olabanji

Ndarana

Davis

2020

Climate

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“…For example, Zhang and Wang (2013) adopt the G‐S model to examine the functions of price discovery and risk transfer in crude oil and gasoline futures markets. Muroyiwa and Mushunje (2018) use the G‐S model to investigate price discovery in the white maize and wheat market of South Africa, and argue that the contribution of spot price appears larger than futures price. Shen, Shi, and Variam (2018) introduce the test statistics based on cross‐quantilogram function and the multivariate quantile regression model (VAR for VaR) to analyse the risk transfer mechanism between U.S. oil and natural gas markets.…”

Section: Literature Reviewmentioning

confidence: 99%

Exploring the dynamic price discovery, risk transfer and spillover among INE, WTI and Brent crude oil futures markets: Evidence from the high‐frequency data

Zhang

2020

Int. J Fin Econ

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In order to test whether Chinese crude oil futures (INE) has already played the role of futures market and whether it has had a significant impact on international benchmark market, we construct the permanent temporary model and Information Share model based on 15 min of high‐frequency trading data from March 26, 2018 to October 30, 2018 to inspect the proportions of new information in INE and Brent markets, and use the Garbade‐Silber model to measure the risk transfer effect. Furthermore, the generalised spillover index is proposed to examine the effects of return and volatility spillovers among INE, WTI and Brent futures markets. The results reveal that: firstly, during the sample period, INE is not yet a promoter of international benchmark crude oil prices, but more obvious followers. Secondly, although INE has begun to display the price discovery function, it is weaker than that of Brent, and the risk transfer function between them does not appear strong. Finally, INE market mainly acts as a net transmitter of return spillover before August 2018, but it has almost always been the net transmitter of volatility spillover during the full sample period. These findings are of interest to policy makers as well as investors for risk hedging and asset allocation of crude oil portfolios.

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“…Furthermore, over 1,000,000 people in South Africa directly rely on farming from the rural quarter for livelihood and additionally about 94% of the rural merchandise which include rice, wheat and maize are consumed within the country (Muroyiwa & Mushunje, 2017). Consequently, the significance of agriculture cannot be overemphasized in South Africa.…”

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confidence: 99%

Climate change and agriculture: Analysis and implication on South Africa

Odimegwu

2022

ASSHJ

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Environmental change is the greatest threat to human life on the planet in the twenty first century. Its miles a manner of unnatural weather exchange, relatively because of ‘nursery gases’ as an after effect of human interest. Agricultural sector is anticipated to be adversely impacted by environmental change both in the present and in the future, thereby negatively impacting means livelihood and food security. Agriculture undoubtedly is a vital economic factor, and means of livelihoods in South Africa. Because Climate change is expected to reduce crop yields in South Africa, thus affecting food security and livelihood, adaptation strategies need to be implemented to mitigate climate change effects. This paper gives a detailed analysis and implications of environmental change effects on agriculture sectors and significance for achieving growth results such as food security, poverty alleviation, and sustainability in South Africa. Future Prospects for South Africa show decreased rainfall, rising heat, and high unpredictability for the better part of the area coupled with severe declines on the drier and marginal western areas, hence it will affect food security. These consequences has great effects for farming production in South Africa. As a result, South Africa is expected to see 10% to 50% reductions in agricultural output, a situation that might increase food insecurity in the region. By perfecting knowledge through educational institutions, knowledge will be raised concerning the impact of climate change and how to militate against present and anticipated circumstances.

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Price Discovery in the South African White and Yellow Maize Futures Market

Cited by 4 publications

References 19 publications

Impact of Climate Change on Crop Production and Potential Adaptive Measures in the Olifants Catchment, South Africa

Impact of Climate Change on Crop Production and Potential Adaptive Measures in the Olifants Catchment, South Africa

Exploring the dynamic price discovery, risk transfer and spillover among INE, WTI and Brent crude oil futures markets: Evidence from the high‐frequency data

Climate change and agriculture: Analysis and implication on South Africa

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