Intra-annual sheep price patterns and factors underlying price variations in the central highlands of Ethiopia

A sheep market survey was undertaken to determine the effects of certain animal and market characteristics on price and the pattern of sheep prices in relation to seasons. Nine key Ethiopian central highlands markets were surveyed for a period of one year in 1989. Each market was surveyed once a week on the main market day. Price, weight, sex, age, colour, condition score, breed type and buyer's purpose were recorded for all completed transactions as well as the numbers offered and sold on each market day. A total of 50062 cases were recorded. Three markets, each representing redistributive, intermediate and terminal markets, as identified by the distribution in buyer's purpose were chosen for further analysis. Considerable weekly price variation was evident in these markets. Prices were also seasonal with higher premiums paid during some religious festivals. Animal characteristics (weight, age, condition, sex, colour) as well as buyer's purpose and seasons were variably important in explaining variation in price among animals within weeks. Variations in the composition of these characteristics from week-to-wcek were among factors underlying changes in weekly mean prices. R² varied from 0.2659 to 0.3583 in the quadratic price per kg model and from 0.7822 to 0.8413 in the quadratic price per head model in the three markets. However, it was found that price per head was predicted equally well overall by estimated price per kg multiplied by actual weights and that because of wide variation in weights, both within and between weeks, price per kg is more useful market information.     

Buyer preferences for sheep and goats in southern Nigeria: A hedonic price analysis

A survey of two rural markets in southwest Nigeria over 14 months showed that supplies, sales and prices of sheep and goats varied widely during the period with a sharp peak during the Muslim festival of' Eid-el-Kabir and a smaller peak during the Christmas-New Year period. Local West African Dwarf (WAD) sheep and goats and northern Y'ankasa sheep and Red Sokoto goats were traded in the markets and animals were purchased for rearing, trading, ceremonies, butchering/catering, sacrifice, and festivals. There were significant differences between species/breeds purchased for various purposes. A hedonic price model was fitted to determine factors influencing price. After adjustments were made for age, weight, sex, time of transaction and market, WAD sheep commanded higher prices than WAD goats and Red Sokoto goats for all purposes except for butchering/catering; Red Sokoto goats commanded similar or lower prices than WAD goats depending on the purpose for purchase; and Y'ankasa sheep, principally purchased for the Eid-el-Kabir festival, commanded marginally higher prices than WAD sheep. The market share of WAD sheep is currently small and is under competition from northern sheep and goats, so increased production of WAD sheep in the south will benefit both producers and consumers in the area. In general, the results indicate that buyers have preferences for specific breeds and species for specific purposes, so producers and sellers may benefit by targeting specific buyer categories and times of the year.     

Price Transmission in Nigerian Food Security Crop Markets

This paper comprehensively examines price transmission from world, neighbour country, and internal commercial hub markets to Nigerian urban markets, as well as from urban to rural markets within the country, for seven key food security crops (maize, millet, sorghum, rice, cassava, yams and cowpeas). There are three key findings: (i) tradability matters for price transmission, but tradability varies across crops and regions. The strongest international linkages are with neighbouring countries. Rice price transmission is high across all markets, while coarse grain price correspondence is low with world prices but high with neighbour country market prices; (ii) our results imply that local conditions matter for price transmission, and are relatively more important than trade for some crops (e.g. yams, cassava) than others (e.g. imported rice, maize); (iii) larger than expected long‐run price transmission parameters in world and neighbour countries for rice and coarse grains suggest that, in these select markets, there are either large transactions costs or quality premiums that vary systematically with border prices, and/or mark‐ups captured by traders with market power.     

Price expectations of sheep and goats by producers and intermediaries in Quetta market,Pakistan

Analysis of producers' and intermediaries' livestock price expectations was used to describe the market in Quetta, the largest livestock market in the highlands of Balochistan Province, Pakistan, and to identify factors that determine price expectations of small ruminants. A total of 4800 expected prices for sheep and goats were collected from producers and market intermediaries at monthly intervals between January 1991 and December 1992. In addition to the expected price of the animal, liveweight, species, sex, breed, body condition (fatness), calendar day and month were recorded, and whether data were collected on a meat or meatless day. Monthly rainfall data were also collected. Models of goat and sheep price expectations were built to compare the similarity of the behaviour of producers and intermediaries. Results indicated that producers and intermediaries expected high prices from November to January and during religious holidays. They expected premiums and discounts related to animals' attributes. Liveweight and seasonality had the strongest effect on prices. Rainfall in the current and previous month was positively related to seller's expected prices suggesting that livestock are retained to take advantage of favourable grazing conditions. The models of price expectations showed that producers adjusted expected goat prices (P ≤ 0.10) for seasonality, liveweight, body condition, age, sex and breed, while they adjusted sheep prices for seasonality and liveweight only. High pay-offs could be expected if extension efforts focused on factors that determine sheep meat quality; however, the retail ceiling price of meat and the lack of grading are a disincentive to work in this direction. Seasonality of supply and demand is important in determining prices and this study provides baseline information for market scheduling; however, scheduling of sales of transhumant pastoralists may be difficult to achieve. Further investigation is justified to understand the gap in marketing knowledge between producers who sell in the villages and those who sell in Quetta.     

The effects of China's growth on the food prices and the food exports of other developing countries

This article explores the impacts of China's growth in the international markets of agricultural products along two dimensions: food price inflation and export growth in other developing countries. China's food imports of vegetable oils have grown dramatically over the last decade, linking China's economic growth to the recent increases in global food prices. If China is a source of global food price inflation, exporting countries will benefit whether they sell directly to China or not. These direct and indirect linkages are explored using a short‐run, partial‐equilibrium model of international trade in agricultural products in which consumer prices and trade costs are derived from bilateral trade flows. China's effects on food prices and exports are estimated by reducing Chinese food expenditures in 2007 by half, roughly China's level of expenditures in 1995. Results indicate that food prices as measured by CES price indexes in developing Asia, Africa, and Latin America would have been reduced by 1.27%, 0.32%, and 0.22%, respectively. China has been an important source of growth for exporters selling directly to China. There is no evidence of export growth due to an overall increase in food prices caused by China's growth.     

Cotton market integration and the impact of China's new exchange rate regime

This article studies the integration of China's cotton market with the international market, especially the U.S. market. Investigating the futures prices from the Intercontinental Exchange (ICE) in the U.S. and the Zhengzhou Commodity Exchange (ZCE) in China with several time series models, we find that a long‐run cointegration relationship exists between these two series. The two markets share price transmissions, and based on results from an Autoregressive Conditional Heteroskedasticity (ARCH) model, we find their price volatilities are similar. We argue that China's recent exchange rate reform and its gradual liberalization in bilateral cotton trade since it joined World Trade Organization have had important impacts on these futures markets. Based on these findings, several important economic and policy implications are derived.     

PRICE ARBITRAGE BETWEEN QUEENSLAND CATTLE AUCTIONS

In a competitive market with free information flows, spatial arbitrage will ensure that average prices at geographically separate markets will move in unison. The speed of adjustment is related to information flows between markets; if adjustment lags exist, there may be opportunities for arbitragers to gain. The transmission of price information is modelled using Johansen's procedure and the existence of long-run arbitrage opportunities is investigated. An innovation analysis is used to examine the varying responses to changes in prices at spatially separate markets.     

The Spatial Integration of Paddy Markets in Vietnam

This paper examines whether there is spatial integration between and within paddy markets in the north and south of Vietnam. The empirical model developed uses estimates of transfer costs to generalise Ravallion's model of spatial market integration to allow for threshold effects. A sequential testing strategy is used to test for market segmentation, the number of thresholds, long‐run integration, informational efficiency and the Law of One Price within an error‐correction framework. We find neither threshold effects nor weak evidence of paddy market integration between northern and southern Vietnam. There is, however, evidence of both threshold effects and stronger market integration within the Red and Mekong River deltas. Whenever price spreads exceed their thresholds, at least 60% of price changes are transmitted between regional markets within a month. Nonetheless, the instantaneous version of the Law of One Price only holds for a few regimes and market pairs. These results suggest that national level policies cannot be relied upon to stabilise or support paddy prices in Vietnam. Instead, policies need to be designed with the specific production, consumption and marketing characteristics of northern and southern Vietnam in mind.     

Testing vertical price transmission for Vietnam's Robusta coffee

Vietnam has undergone market reforms over the last three decades; and as a consequence, the coffee sector has become increasingly market‐driven. The success of the government's liberalisation policies in terms of market efficiency is investigated by examining the transmission of both positive and negative price changes for Robusta coffee between export and farmgate prices. We used a threshold vector error correction model and high‐frequency daily data. The primary result here is that of a symmetric price transmission between export and farm‐level prices. This result holds when tested with weekly price data, derived from the daily data. Farmgate prices respond faster to decreases than increases in export prices when the long‐run deviation exceeds a certain threshold. These price changes are transmitted within several days. This research also confirms the importance of transaction costs, and other price frictions mostly ignored in prior analyses for coffee.     

A TEST FOR PRICE INTEGRATION IN THE EC LAMB MARKET

The purpose of this paper is to test for price integration in the British-French markets for lamb in the period after the introduction of the EC sheepmeat regime in 1980. A Holmes-Hutton rank order procedure is used to determine if price changes in one market cause price changes in the other market and thus define an integrated market. Using weekly price data for the period 1983-86, the results indicate that the British-French lamb markets are integrated in that a price change in one market is fully reflected in price changes in the other. However, there is considerable lag time in response to price changes. This may be attributed to less than perfect substitution between the British and French product, to the ex post nature of the clawback provision that existed in the British price support system during the period of analysis, and to informal trade barriers.     

Distance and Border Effects on Price Transmission: A Meta‐analysis

Using price transmission estimates for 1,189 cereal market pairs extracted from 57 published studies in a meta‐analysis, we examine whether geographic distance and separation by an international border affects the strength and speed of price transmission. Our findings indicate that a border reduces the likelihood that two cereal prices will be cointegrated by 23%, and each additional 1,000 km of distance reduces the probability of cointegration by 7%. The speed of price transmission is on average 13 percentage points per period faster between prices that are located within the same country compared with cross‐border price pairs. Our meta‐analysis also indicates that increasing distance strongly reduces the speed of price transmission on domestic markets, but that the effect of distance on the speed of transmission is considerably weaker for trade over longer international distances. Overall, these results confirm expectations and complement the findings in the trade literature that borders and distance affect trade flows and price dispersion.     

A CGE analysis of trade costs in the Russian agrofood sector

Ten years after the end of central planning, enormous interregional price differences indicate that Russian food markets are not well integrated spatially. Trade potentials are thus not exploited, most probably because of high trade costs. Besides transport costs, transaction costs seem to play an important role as an impediment to interregional arbitrage. These transaction costs can be very high in transition countries due to underdeveloped market structures and weak public institutions. After subtracting transport costs from interregional price differences, large differences remain, particularly in the case of high‐value products. It is assumed that these residual price differences constitute the transaction cost component of total trade costs. The regional economic impact of different trade cost components is quantified using a bi‐regional computable general equilibrium (CGE) model. Simulations show that the results are quite different between the two stylized regions (East and West), depending on which trade cost component is reduced. While the welfare effects of varying customs tariffs and transport margins are rather limited, lower transaction costs of trade seem to be a promising way to achieve a better functioning food market in Russia.     

Transaction Cost Thresholds in International Rice Markets

Recent episodes of high and volatile prices for grains such as rice have raised concerns about their implications for hunger and poverty. We model price relationships between international rice prices and 221 domestic prices in 47 developing countries that import rice. We use a threshold vector error correction model that accounts for transaction costs of trade in spatial price transmission, and an improved regularised Bayesian threshold estimator for threshold models. Our results show that threshold values are higher after 2008 than before, which suggests that transaction costs in international rice trade have increased in recent years. Threshold values are highest for Latin American countries followed by African and Asian countries, and higher for retail than for wholesale prices. Since 2008, price transmission is slower in countries that responded to high and volatile prices with domestic market‐based interventions such as price controls and faster in countries that responded by lowering tariffs and by implementing production support measures.     

Grain price stabilization in India: Evaluation of policy alternatives

Stabilization of prices is an important element of food policy in India as in most other countries — both developing and eveloped. However, since the magnitude of grain stocks held for this purpose as well as the costs of physical storage have become prohibitively high, there is now a need for finding cost-effective alternatives including non interventionist and market-oriented methods for price stabilization. In this paper we consider the case of rice and wheat which are staple foodgrains in India. We make a comparison between alternative price stabilization policies including that of holding buffer stocks in terms of their impact on domestic price stability, producer and consumer welfare and government costs. A multi-market equilibrium framework is used where private storage, consumption, supply and prices of rice and wheat are determined simultaneously. Indian exports and imports are assumed to affect world prices. The alternative price stabilizing mechanisms are ranked according to both the criteria, welfare and price stability achieved. The main findings are as follows. The ranking of alternatives varies with the criterion used. Greater price stability need not necessarily imply greater welfare. The option of variable levies on private external trade turns out to be the most inexpensive and that of domestic buffer stocks the costliest in achieving price stability. Further, the efficacy of buffer stocks and subsidy to private storage in stabilizing prices is lower under free trade as compared to the case where the economy is closed to private external trade.     

新一轮国际粮食价格上涨：原因及对中国市场的影响

[目的]随着中国粮食进口不断增加,国内外市场联系越来越紧密。2020年下半年以来,国际市场粮食价格快速上涨,对国内粮食市场产生一定影响,分析国际市场价格上涨的原因和影响对确保国内粮食供应稳定、保障国家粮食安全具有重要意义。[方法]文章分析了2019年以来小麦、大米、玉米、大豆4种粮食产品的国内外价格走势,从供需状况、贸易政策、气候变化等因素分析国际市场价格波动的原因,并探讨了国际价格对国内价格的影响。[结果]当前全球主要粮食品种供应充足,库存仍处于较高水平,此轮国际粮食价格上涨主要是受到美国等发达国家宽松的货币政策以及疫情后全球消费逐步回暖的影响;但国际市场价格上涨对中国市场的影响总体有限,国内小麦、大米、玉米价格上涨的主因是国内消费回暖和生猪产能恢复带动的饲用需求快速增长,油用大豆受国际市场的影响较大。[结论]为稳定国内粮食市场,避免国际市场的冲击,中国要进一步提升粮食综合生产能力,强化科技支撑,加强粮食储备管理,健全政策支持体系,并引导居民建立科学的消费观念。     

Price transmission,asymmetric adjustment and threshold effects in the cotton supply chain: a case study for Vidarbha,India

This study examines price transmission asymmetries in Vidarbha's (India) cotton supply chain from 2002 to 2012. The analysis takes account of thresholds in price adjustments toward their long‐run equilibrium. The first stage considers the price dynamics between international and Indian domestic cotton prices. The second stage considers price transmission from domestic to farm gate cotton prices in Vidarbha. Results from the first stage indicate that Indian and international cotton markets are well‐integrated. In contrast, the second stage reveals significant threshold‐type nonlinearities as well as asymmetries in price transmission between domestic and farm gate prices. The short‐run dynamics suggest that the pass‐through from domestic to farm gate prices is larger when domestic prices decrease than when they increase. Moreover, back of the envelope calculations suggest that the loss in revenue for a typical farmer from a decrease in domestic price is larger than the gains from an increase in domestic price of the same magnitude. The implication is that traders benefit from price fluctuations at the expense of farmers. Evidence from fieldwork in Vidarbha suggest that asymmetries revealed in this analysis may be linked to trader's market power and inadequate market information among farmers.     

Price shock transmission: evidence from the wheat‐bread market value chain in Ethiopia

This study assesses the degree of vertical price transmission along the wheat‐bread value chain in Ethiopia. This is pursued by applying a vector error correction model and an impulse response analysis using monthly price data for the period 2000–2015. Our analysis considers transmission of price shocks across different market levels, including from the international and domestic wheat grain markets at the upstream to the domestic wheat bread market at the downstream of the value chain. The empirical findings indicate that significant cointegration exists across prices of the different market stages. There is a transmission from international prices to domestic prices at downstream markets, in particular to flour and bread prices. Prices at upstream markets are largely influenced by the domestic wholesale market. In general, the speed of adjustment is quite slow with a half‐life of about one year for restoring the equilibrium price relationship. As price margins between the different market stages in the value chain have substantially decreased in the last 15 years, higher transmission, and thus exposure to international market shocks, can be expected in the future. The results also show that causal relationships exist between prices at different market stages—with the wholesale market identified as the key market level where prices and price expectations are formed.     

The Canadian Beef and Pork Sectors: New Found Relevance of Live Market Information

The structure of price transmission both vertically (between links in the market channel) and horizontally (between market areas) for beef and pork in Canada is examined. The analysis of vertical price transmission indicates that farmgate prices lead retail prices. The hypothesized relationship between retail and farmgate prices is that the farmgate demand curve is shifted by wholesaler anticipation of the retail price changes. Such a situation would place greater importance on the live markets since prices determined in these markets would eventually be reflected in the retail market. The results have further implications for the determination of price margins and related policy issues.     

Agricultural price transmission across space and commodities during price bubbles

This article investigates agricultural price transmission during price bubbles. The empirical approach concerns the horizontal transmission of cereal prices both across different market places and across different commodities. The trade policy intervention put forward to mitigate the impact of price exuberance is considered. The analysis is performed using Italian and international weekly spot (cash) price data over years 2006–2010, a period of generalized turbulence of agricultural markets. Firstly, the properties of price time series are explored; then, interdependence across prices is specified and estimated by adopting appropriate cointegration techniques. Results suggest that the bubble had only a slight impact on the price spread and the temporary trade‐policy measure, when effective, has limited this impact.     

Measuring Integration and Efficiency in International Agricultural Markets

This paper critiques the methods used to investigate integration and efficiency in international markets. Integration is best reflected by flow-based indicators of tradability, while efficiency is related to price-based notions of market equilibrium. Data insufficiency poses a serious constraint because empirical tests that rely on just prices cannot separate tests of the market efficiency hypothesis from tests of the strong assumptions underpinning model specification. Finally, even if market efficiency holds, there may nonetheless be considerable social inefficiency remaining due to trade barriers and excessive costs of commerce.