Are current EU cereal prices correlated?

Rafal Buczkowski; Tomás García Azcárate

doi:10.7201/earn.2015.02.06

Authors

Rafal Buczkowski European Commission
Tomás García Azcárate Instituto de Economía, Geografía y Demografía del CSIC; Solvay Brussels School n Economics and Management (SBSEM); Académie de l’Agriculture de France

DOI:

https://doi.org/10.7201/earn.2015.02.06

Keywords:

Cereals, Common Agricultural Policy, Europe.

Abstract

This paper evaluates the correlations between European cereal prices in up to 87 markets of 24 Member States. History and geography play a role: The highest correlations are observed between closely located internal markets of the “old” Union; prices are more correlated along transport routes, in particular rivers. We observe that 10 years after the Accession (8 in the case of Rumania and Bulgaria) we do not have a complete integration between the “old” and the “new” Member States. We advance several possible explanations: Weaker producers’ organisations, lack of storage facilities, less efficient transport facilities.

Downloads

Download data is not yet available.

Author Biography

Rafal Buczkowski, European Commission

Colaborador Cientifico CSIC. Miembro de la Academia de la Agricultura de Francia.Maître de Conférence

References

Abdulai, A. (2000). "Spatial price transmission and asymmetry in the Ghanian maize market". Journal od Development Economics, 63(2): 327-349. https://doi.org/10.1016/S0304-3878(00)00115-2

Ahlgren, N. and Antell, J. (2010). "Stock market linkages and financial contagion: A cobreaking analysis". The Quarterly Review of Economics and Finance, 50(2): 157-166. https://doi.org/10.1016/j.qref.2009.12.004

Ankamah-Yeboah, I. (2012). "Spatial price transmission and asymmetry in the Ghanian maize market". Munich Personal RePEc Archive (MPRA), Paper No. 49720. Available at: http://mpra.ub.uni-muenchen.de/49720/. Last access: November, 2013.

Assefa, T.T., Meuwissen, M.P.M. and Oude Lansink, A.G.P.M. (2013). Literature review on price volatility transmission in food supply chains, the role of contextual factors and the CAP's market measures. Working paper n°4 ULYSSES project, EU 7th Framework Programme. Available at: http://www.fp7-ulysses.eu/publications/ULYSSES%20Working%20Paper%204_Price%20volatility%20transmission%20in%20food%20supply%20chains.pdf. Last access: November, 2013.

Balcombe, K., Bailey, A. and Brooks, J. (2007). "Threshold effects in price transmission: The case of Brazilian wheat, maize, and soya prices". American Journal of Agricultural Economics, 89(2): 308-323. https://doi.org/10.1111/j.1467-8276.2007.01013.x

Bekaert, G., Harvey, C.R. and Ng, A. (2005). "Market integration and contagion". Journal of Business, 78(1): 39-70. https://doi.org/10.1086/426519

Ben-Kaabia, M. and Gil, J.M. (2007). "Asymmetric price transmission in the Spanish lamb sector". European Review of Agricultural Economics, 34(1): 53-80. https://doi.org/10.1093/erae/jbm009

Bijman, J., Krijn J. Poppe, C.I., Gijselinckx, C., Hagedorn, K., Hanisch, M., Hendrikse, G.W.J., Kühl, R., Ollila, P., Pyykkönen, P. and van der Sangen, G. (2012). Support for farmers cooperatives, Final report. European Commission. Available at: http://ec.europa.eu/agriculture/external-studies/2012/support-farmers-coop/fulltext_en.pdf. Last access: February, 2014.

Brummer B., von Cramon-Taubadel, S. and Zorya, S. (2009). "The Impact of Market and Policy Instability on Price Transmission between Wheat and Flour in Ukraine". European Review of Agricultural Economics, 36(2): 203-230. https://doi.org/10.1093/erae/jbp021

Dungey, M., Fry, R., González-Hermosillo, B. and Martin, V.L. (2005). "Empirical modeling of contagion: A review of methodologies". Quantitative Finance, 5(1): 9-24. https://doi.org/10.1080/14697680500142045

Dungey, M., Fry, R., González-Hermosillo, B. and Martin, V.L. (2007). "Contagion in global equity markets in 1998: The effects of the Russian and LTCM crises". North American Journal of Economics and Finance, 18(2): 155-174. https://doi.org/10.1016/j.najef.2007.05.003

Ejrnæs, M. and Persson, K.G. (2000). "Market integration and transport costs in France 1825-1903: A threshold error correction approach to the Law of One Price". Explorations in Economic History, 37(2): 149-173. https://doi.org/10.1006/exeh.2000.0733

Fackler, P.L and Goodwin, B.K. (2001). "Spatial Price Analysis". In Rausser, G. and Gardner, B. (Eds.). Handbook of Agricultural Economics. Elsevier, Amsterdam. https://doi.org/10.1016/S1574-0072(01)10025-3

Federico, G. (2012). "How much do we know about market integration in Europe?" The Economic History Review, 65(2): 470-497. https://doi.org/10.1111/j.1468-0289.2011.00608.x

Gaetano Santeramo, F. and Cioffi, A. (2012). "Transmission of market crisis in the European vegetables sector". PAGRI, 2/1012: 37-46.

Goodwin, B. K. and Piggott, N.E. (2001). "Spatial market integration in the presence of threshold effect". American Journal of Agricultural economics, 83(2): 302-317. https://doi.org/10.1111/0002-9092.00157

Harriss, B. (1979). "There is method in my madness: Or is it vice-versa? Measuring agriculturalmarket performance". Food Research Institute Studies, 17(2): 197-218.

Hassouneh, I., Serra, T. and Gil, J.M. (2010). "Price transmission in the Spanish bovine sector: the BSE effect Price transmission in the Spanish bovine sector: The BSE effect". Agricultural Economics, 41(1): 33-42. https://doi.org/10.1111/j.1574-0862.2009.00423.x

Heytens, P.J. (1986). "Testing market integration". Food Research Institute Studies, 20(1): 25-41.

Lentz, E.C. and Barrett, Ch.B. (2012). Notes on the Market Information and Food Insecurity Response Analysis Framework. March. Available at:http://dyson.cornell.edu/faculty_sites/cbb2/MIFIRA/course/. Last access: November, 2013.

Mohendru, I.D. (1937). Some factor affecting the price of wheat in Punjab. Publication No. 49, Board of Economic Inquiry, Lahore, Civil and military Gazette, ltd. Punjab Government. India.

Rigobon, R. (2003). "On the measurement of the international propagation of shocks: Is the transmission stable?" Journal of International Economics, 61(2): 261-283. https://doi.org/10.1016/S0022-1996(03)00007-2

Sanjuán, A.I. and Gil, J.M. (2001). "Price transmission analysis: a flexible methodological approach applied to European pork and lamb markets". Applied Economics, (1): 123-131. https://doi.org/10.1080/00036840122171

Serra, T., Goodwin, B.K., Mancuso, A. and Gil, J.M. (2006). "Non-Parametric Modeling of Spatial Price Relationships". Journal of Agricultural Economics, 57(3): 501-522. https://doi.org/10.1111/j.1477-9552.2006.00062.x

Tangermann, S. (1992). Agricultural price Trends in the EC. Report prepared for the Commission of the European Communities. EC Commission, Brussels.

Timmer, C.P. (1984). Corn Marketing and the Balance Between Domestic Production and Consumption. Working Paper No. 14, BULOG-Stanford Corn Project. Stanford University, USA.

Zanias, G.P. (1999). "Seasonality and Spatial Integration in Agricultural (Product) Market". Agricultural Economics, 20(3): 253-262. https://doi.org/10.1111/j.1574-0862.1999.tb00571.x