Black Sea and World Wheat Market Price Integration Analysis

In 2008–10, Russia and Ukraine together exported an average of 29 million tons of wheat per year, and have become important players in the international wheat market. This research summarizes the short‐ and long‐run wheat price dynamics between Ukraine and Russia, and other major wheat exporters—the United States, European Union (EU), and Canada—from 2004 to 2010. Tests of market price co‐integration (Johansen maximum likelihood test and residual‐based tests) as well as threshold error correction techniques were performed for this purpose. The results suggest that Russian wheat prices were co‐integrated with EU and U.S. wheat prices but not with Canadian wheat prices. Ukrainian wheat prices were found to be co‐integrated with French wheat prices only. The estimated long‐run wheat price transmission elasticities were estimated to be equal to 1.04 between Russian and French (a representative country of the EU) wheat prices, 1.16 between Russian and U.S. wheat prices, and 1.05 between Ukrainian and French wheat prices. We also found the short‐term relationships between the co‐integrated series to be statistically significant. Price adjustments in all co‐integrated prices were found to be symmetric.     

Price Asymmetry in the International Wheat Market

Most wheat exports are accounted for by a limited number of countries with different policy regimes and specializing, for the most part, in particular classes of wheat. Under these circumstances, there is likely to be considerable interaction among the major exporting countries in the determination of wheat prices. In this paper, price linkages between the U.S. and other exporting countries (Canada, the European Union, Argentina and Australia) in the world wheat market are investigated. After determining that the direction of causality is from U. S. prices to the prices of other exporting countries, the nature of the price linkages is studied. The results suggest that the major exporting countries respond asymmetrically to U.S. price changes. The degree of asymmetry differs from one exporting country to another, Argentina and the European Union show greater response to falling prices than to rising prices, while the opposite is true for Canada and Australia.     

The Market Structure and Price Competition in China's Wheat Import Market:

This paper reveals that wheat exporters to China compete in an imperfectly competitive market. U.S. wheat exports face strong price competition from Argentina, Australia, Canada, and the European Community, but has a highly elastic demand in China. By adopting an aggressive promotion policy, the U.S. could reduce the market shares of Argentina and Canada. China would shift to wheat from Argentina, Australia, and Canada if U.S. wheat exports were interrupted because of high prices or non-price trade frictions. An expansion in China's wheat imports would accrue to wheat from Argentina and the U.S.     

Segmenting the Wine Market Based on Price: Hedonic Regression when Different Prices mean Different Products

Many economists have estimated hedonic price functions for red and white wine. However, estimating a single hedonic price function imposes the assumption that the implicit prices of the attributes are the same for any red or white wine. We argue that even within these two categories, wines are differentiated, and disregarding this heterogeneity causes an aggregation bias in the estimated implicit prices. By estimating hedonic functions specific to price ranges, we show that the wine market is segmented into several product classes or market segments. We find that a model accounting for the existence of wine classes has greater ability to explain the variability in the data and produces more accurate and interpretable results regarding the implicit prices of the attributes.     

Impacts of BSE on World Trade in Cattle and Beef: Implications for the Canadian Economy

This paper evaluates the impact of BSE‐related trade restrictions on Canada using a general equilibrium model. It links selected results of the Global Trade Analysis Project (GTAP) approach, a global computable general equilibrium model, with Basic Model of Regional Trade (BMRT), a Canadian regional model. We find first, that while producers were hurt a lot, there are other general equilibrium considerations (gains to processors and/or consumers) and sectoral adjustments that at the regional level tend to partially offset the losses suffered by producers. We also assess the extent to which opening of the U.S. border is important relative to access to the rest of the world. Our results indicate that the losses to the Canadian economy are around $1 billion and they were reduced significantly when Canada resumed beef trade with the United States, as a result of various government allegations. Le présent article évalue, à l'aide d'un modèle d'équilibre général, les répercussions des restrictions commerciales imposées envers le Canada à la suite de la découverte d'un cas d'ESB. Il établit un lien entre les résultats sélectionnés du Projet d'analyse des échanges commerciaux (GTAP), un modèle d'équilibre général mondial et programmable, et ceux du Modèle de base des échanges régionaux (Basic Model of Regional Trade – BMRT), un modèle régional canadien. Bien que les producteurs aient été très touchés, il faut considérer d'autres éléments d'équilibre général (gains réalisés par les transformateurs et/ou les consommateurs) et des ajustements sectoriels qui, à l'échelle régionale, tendent à compenser partiellement les pertes subies par les producteurs. Nous avons évalué l'étendue de l'importance de l'ouverture des frontières des États‐Unis par rapport à l'accès au marché du reste du monde. Selon nos résultats, les pertes pour l'économie canadienne avoisinent le milliard de dollars et ont considérablement diminué lorsque le Canada a repris le commerce duf avec les États‐Unis à la suite de diverses allégations de la part du gouvernement.     

A Reexamination of Price Dynamics in the International Wheat Market

This paper examines price relationships in the international wheat market for the years 1981–93 using a cointegration and error correction approach. Price series are found to be first-differenced stationary and cointegrated. Our results provide evidence that the United States, Australia, the European Union and Argentina react to Canada's pricing decisions, whereas Canada does not respond to any other price changes except Australia's. Similarly, the United States also plays a strong role in the pricing of other exporters (except Canada) and its pricing decision is affected by changes in Canadian and Australian prices. The remaining exporters such as the European Union and Argentina respond to the U.S. and Canadian price changes but do not have any influence on other prices. Overall, our results suggest that there is no distinct price leader in the international wheat market. Nous examinons les rapports deprixjouantsur le marché international du blé durant la période 1981–1993, suivant une démarche de co-intégration et de correction des erreurs. Nous avons constaté et vérifié que les séries de prix se révélent stationnaires lorsqu‘exprimées en première différence et qu‘elles sont cointégrées. Nos observations démontrent que les États-Unis, I'Australie, I'Union européenne et I'Argentine réagissent aux décisions de tariflcation prises au Canada et que de son côté, le Canada ne réagit à aucun autre changement du régime de tarification sauf à celui de I'Australie. De même, les États-Unis jouent également un rôle important dans la tarification des autres exportateurs (le Canada excepté) et ses décisions de tarification sont sensibles aux changements affectant les prix canadiens et australiens. Le reste des exportateurs, notamment I'Union européenne et I'Argentine, sont en mesure de réagir aux changements des prix appliqués aux États- Unis et au Canada, mais Us n‘ont aucune influence sur la tarification des autres exportateurs. Toutes ces observations nous amènent à conclure qu'il n'y a pas vraiment de leader dans l'établissement des prix du blé sur le marché international.     

Produce Retail Price Volatility and Perceptions in the Canadian Market: Nutrition Security Variances

Nutrition security has been studied but rarely in the context of a developed economy. Furthermore, few studies have looked at how fluctuating produce process may influence nutrition security and how consumers cope with abrupt macro-economic changes. Between 2014 and 2015, Canadian consumers saw produce prices jump by more than 25% in a year in some cases. This exploratory survey looks at socioeconomic factors and evaluates how price increases influence produce consumption and substitution. A total of 1007 respondents participated in a cross national survey over a two-week period. Results show that lower income households are more vulnerable than higher income respondents. Results also explore a few more behavioral factors such as where produce shopping occurs and how market data is gathered before purchases. Respondents who consult flyers and use apps are more likely to behave rationally and cope with changing prices. Some limitations are presented. And finally, future research thrusts related to produce price fluctuations and nutrition security are suggested.     

Wheat-Importing State Trading Enterprises: Impacts on the World Wheat Market

State trading emerged as one of the more contentious issues at the end of the Uruguay Round of negotiations under the General Agreement on Tariffs and Trade, and US. officials have said that state-trading is an important issue for further negotiation in the mini-round on agriculture scheduled to begin in 1999. The prevalence of state trading by wheat-importing countries is examined, and reasons for reform are explored. This paper investigates two hypotheses: *whether operation of a state trading enterprise is associated with a higher level of protection than with private traders and *whether decisions made by state traders regarding the source of wheat is made on a noncommercial basis. The effective level of protection, net import demand equations and a simple Armington model for U.S. and Canadian wheat exports are estimated to investigate these hypotheses. Behavior is compared across countries who differ in their institutional arrangements for importing wheat. It is also compared over time within countries who have reformed their state trading enterprise to assess whether reform leads to different market behavior. L'intervention directe de 1'État dans les échanges commerciaux extérieurs s'est imposée comme une les questions des plus controversées au terme de l' Uruguay Round des négociations du GATT, et des hauts responsables américains ont laissé entendre qu'il faudra s'y attaquer dans la mini-ronde de négociations sur l ‘agriculture qui doivent commencer en 1999. Nous examinons Vimportance du rôle de I'État chez les pays importateors de blé en explorant les raisons justifiant une réforme. Dewr hypothèses sont considérées: *le fonctionnement de l'agence d'État est liéà un niveau de protection plus élevé qu'il ne l'est avec des interlocuteurs privés et *les décisions prises par l'agence d'État au sujet de la source d'approvisionnement de blé s'ap-puient sur des raisons non commerciales. Pour scruter ces hypothèses, nous calculons le niveau effectif de protection, les équations de demande à l'importation nette et un modèle Armington simple des exportations de bléétats-uniennes et canadiennes. Nous comparons le comportement de pays différant par leurs structures offcielles d'importation du blé. Nous étudions aussi son évolution dans le temps chez les pays qui ont réformé leur agence centrale de commerce extérieur, afin de voir si ces réformes ont conduit à un comportement d'affaires différent.     

The Welfare Effects of Export Constraints on the Canadian Feed Grain Market

Export constraints have an important effect on the domestic pricing of feed grains since they increase the supplies of feed grain available for domestic consumption. This paper examines and quantifies the welfare effects of "physical" and "institutional" export constraints before and after the adoption of the Domestic Feed Grains Policy (1974).
Les contraintes à l'exportation ont un effet important sur l'établissement du prix intérieur des céréales fourragères, car elles accroissent les stocks de céréales fourragères disponibtes pour la consommation intérieure. Le présent document examine et quantifie les effets sur le bien-étre des contraintes "physiques" et "institutionnelles"à l'exportation avant et apres l'adoption de la politique des céréales fourrageres du Canada (1974).     

Price Discrimination in the Context of Vertical Differentiation: An Application to Canadian Wheat Exports

The ability of the Canadian Wheat Board (CWB) to price discriminate in wheat exports is examined. The conceptual model shows that the CWB's ability to exploit cost differences in pricing depends on the extent of differentiation between Canadian and U.S. wheat. This model is implemented using monthly confidential price data for exports to four markets from 1982 to 1994. The empirical results support the conclusions that (1) the CWB has market power emerging from product differentiation, (2) the CWB price discriminates across export markets, and (3) Alchian–Allen effects are important in pricing in markets valuing quality such as Japan and the United Kingdom.     

Compatibility of Government Guarantees with Flexibility in Canadian Wheat Price Pooling

Financial option theory is used to evaluate Canadian Wheat Board (CWB) price pooling and associated government guarantees. Price guarantees and final payments on the pool can be viewed as special financial derivative products. Financial models are used to evaluate alternative pricing flexibility alternatives within the constraints of the CWB price pooling system and at the same time to provide a measure of the CWB dollars at risk associated with offering these contracts. Flexible pricing alternatives are incompatible with a government price guarantee that is valuable. The CWB dollar risk associated with flexible pricing could be substantial.
Les auteurs recourent à la théorie des contrats d'option pour évaluer le système de fixation de prix communs par la Commission canadienne du blé (CCB) et les garanties connexes du gouvemement. On peut considérer les prix garantis et les paiements finals du pool comme un type particulier de produits dérivés. Des modéles financiers permettent d'évaluer d'autres méthodes qui autoriseraient la fluctuation des prix dans les contraintes du systéme de pool de la CCB, mais serviraient aussi à mesurer les risques financiers de la CCB associés à la proposition de contrats. Les autres méthodes de fixation des prix sont incompatibles avec une garantie valable du gouvemement au niveau des prix. La CCB courrait le risque de penes importantes si elle adoptait une politique de variation des prix.