Price formation within Egypt's wheat tender market: Implications for Black Sea exporters

Heigermoser, Maximilian; Götz, Linde; Svanidze, Miranda

doi:10.1111/agec.12656

Cited by 9 publications

(10 citation statements)

References 39 publications

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“…Some scientists believe that over the last two decades, the Black Sea region developed to be a key global exporting region for corn and wheat [7]. We fully agree with Heigermoser et al, who note that many market participants grapple with insufficient knowledge of factors that drive Black Sea spot prices, while effective futures markets that could facilitate price discovery and risk management are still missing.…”

Section: Literature Reviewsupporting

confidence: 73%

Black Sea region in world grain trade and problematic aspects of development

Ilchuk,

Pankratova,

Popova

et al. 2023

IOP Conf. Ser.: Earth Environ. Sci.

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The research objective is an analysis of the participation of the Black Sea Basin countries (Ukraine, Russia, Kazakhstan, Bulgaria and Romania) in world grain trade. We started this research before the start of Russia’s military actions in Ukraine, and completed it during these actions, so we have a vision of the situation before and after start of war. Subject of research: stability of grain supplies (wheat, corn, barley) from the Black Sea region as a whole and from some of its countries. Results of the research: The research revealed the growing role of the Black Sea region in the pre-war period in the world grain market and identified its key leaders. The share of the Black Sea region in world trade in wheat increased to 34%, barley – to 40,6%, corn – to 25,3% in 2019/2020 marketing year. The calculated coefficients of variation confirmed the decrease in the scattering of grain exports in 2015-2020 vs. 2010-2015, which indicates an increase in stability and reliability of supply in this period. The situation changed radically after the Russian invasion of Ukrainian territories. The maritime logistics corridors of Ukraine that is the one of the key players in this region, were blocked and started working only five months later, but not at full capacity. All these events had its destructive consequences for world trade, in particular, the increase in world prices, disruption of the stability of grain supplies from the Black Sea region and the destruction of established logistics corridors, etc.

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Section: Literature Reviewsupporting

confidence: 73%

Black Sea region in world grain trade and problematic aspects of development

Ilchuk,

Pankratova,

Popova

et al. 2023

IOP Conf. Ser.: Earth Environ. Sci.

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“…For example, in 2020, Egypt imported 60% (5.8 million t) of its wheat from Russia, 26% (2.5 million t) from Ukraine, and 7% (0.6 million t) from France [26]. Heigermoser et al [18] found interdependencies between the GASC prices and the export prices in Russia and France, with a leading role from France (but not Russia) in the formation of the tender prices.…”

Section: The State Of Play On the World Wheat Marketmentioning

confidence: 99%

“…In contrast to Ghoshray [16], we add to the existing literature on global grain market integration by providing an upto-date analysis that includes wheat prices from the Black Sea region. Although Svanidze et al [17] and Heigermoser et al [18] included the Black Sea exporters in their analysis of the world wheat prices, both of the studies exclusively focused on the price relationships between the wheat importing and exporting countries. In particular, they found that the Black Sea markets have become increasingly important for the price formation of the domestic wheat markets in net-importing countries of the South Caucasus and Central Asia [17], as well as Egypt [18].…”

Section: Introductionmentioning

confidence: 99%

“…Although Svanidze et al [17] and Heigermoser et al [18] included the Black Sea exporters in their analysis of the world wheat prices, both of the studies exclusively focused on the price relationships between the wheat importing and exporting countries. In particular, they found that the Black Sea markets have become increasingly important for the price formation of the domestic wheat markets in net-importing countries of the South Caucasus and Central Asia [17], as well as Egypt [18]. In contrast to those studies, we exclusively focus on the price relationships between the exporting countries on the world wheat market.…”

Section: Introductionmentioning

confidence: 99%

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Global Wheat Market Dynamics: What Is the Role of the EU and the Black Sea Wheat Exporters?

Svanidze

Đurić

2021

Agriculture

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Over the last two decades, three countries in the Black Sea Region—Russia, Ukraine, and Kazakhstan—became global leaders in grain production and trade, and replaced the USA and France as the most previous largest wheat exporting countries. In this study we investigate world wheat price linkages and identify the current “price leaders” of the global wheat market. This empirical analysis is focused on the price relationships between eight of the largest wheat exporting countries and uses a cointegration framework and a vector error-correction model. The results show that, regarding price formation on the world wheat market, the French price is more important for transmitting price signals to other wheat export markets compared to the USA. Furthermore, our results indicate that, despite being leaders in wheat export volumes, the Black Sea wheat prices in Russia and Ukraine adjust to price changes in France, the USA, and Canada. Albeit unrealistic in the short run, the creation of the futures market in the Black Sea region might significantly improve the participation of Black Sea markets in price formation of the global wheat market.

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“…This paper contributes to the broader (and older) literature on spatial market integration analysis as well as to the more recent literature on the impact of the COVID‐19 pandemic and policy responses on the functioning of food systems and markets. By evaluating spatial market integration during normal times and during a pandemic, we contribute nuanced empirical evidence to the literature evaluating spatial food market (dis)integration in Africa (Abdulai, 2000; Abay et al., 2023; Asche et al., 2011; Badiane & Shively, 1998; De Matteis et al., 2021; Dillon & Barrett, 2016; Hastings et al., 2021; Heigermoser et al., 2021; Jones & Salazar, 2021). Despite substantial variations across food items and across time (before and during the pandemic), we show significant spatial market integration prior to the pandemic and that patterns of integration declined after its outbreak.…”

Section: Introductionmentioning

confidence: 99%

Spatial market integration during a pandemic: Evidence from food markets in Nigeria

Amare,

Abay,

Hatzenbuehler

2023

Agricultural Economics

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This paper uses comprehensive and long time series monthly food price data and a panel dyadic regression framework to evaluate the impact of the COVID‐19 pandemic and associated policy responses on spatial market integration across a diverse set of food items in Nigeria. The empirical results reveal several important insights. First, we show that a significant slowdown in the speed of adjustment and price transmission occurred during the pandemic. For some food items, the speed of adjustment and, by implication, spatial market integration weakened by two‐ to‐threefold after the outbreak of the pandemic. The effect was especially pronounced for perishable food items. Second, lockdown measures and the spread of the pandemic triggered additional dispersion in market prices across markets. For example, lockdown measures were associated with a 5%–10% reduction in the speed of readjustment toward long‐term equilibrium. Third, additional underlying attributes of markets, including lack of access to digital infrastructure and distance between markets, exacerbated impacts associated with the pandemic. For instance, access to Internet service reduced the slowdown in the speed of adjustment caused by the pandemic, but longer distances between market pairs induced greater slowdown in the speed of price transmission. Our findings offer important insights for revitalizing the efficiency of food markets affected by the pandemic. The heterogenous impacts of the pandemic across value chains and markets reinforce the need to properly target post‐pandemic recovery interventions and investments. Finally, we offer some insights to reduce the vulnerability of food and market systems to disruptions in future pandemics or similar phenomena that inhibit food marketing and trade.

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Price formation within Egypt's wheat tender market: Implications for Black Sea exporters

Cited by 9 publications

References 39 publications

Black Sea region in world grain trade and problematic aspects of development

Black Sea region in world grain trade and problematic aspects of development

Global Wheat Market Dynamics: What Is the Role of the EU and the Black Sea Wheat Exporters?

Spatial market integration during a pandemic: Evidence from food markets in Nigeria

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