Asymmetric Price Transmission in the Livestock Industry of Thailand

Barahona, Jorge Fidel; Trejos, Bernardo; Lee, Jai Wei; Chulaphan, Wanvilai; Jatuporn, Chalermpon

doi:10.1016/j.apcbee.2014.03.016

Cited by 11 publications

(10 citation statements)

References 6 publications

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“…These results enabled to use the cointegration technique to calculate the relationship between international and domestic Mexican beef prices and between a processor and farm beef prices. These results concur with previous studies concerning the non-stationarity of beef prices (21,22,23) .…”

Section: Resultssupporting

confidence: 93%

Transmisión vertical y espacial de precios en el mercado mexicano e internacional de ganado vacuno

Villanueva

2022

Rev. Mex. Cienc. Pecu.

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From 2000 to 2019, the Mexican beef subsector has undergone significant structural changes; the most important was the concentration of both production and marketing stages. In 2019, the Mexican Federal Commission of Competence revealed that, Mexican households’ income diminished between 16 and 31 % due to a lack of market efficiency. In the case of meat, the reduction may be up to 98 %. In this context, the objective of this study was to examine the degree of spatial price transmission between national and international live cattle prices and the vertical transmission between live cattle prices and carcass meat prices to evaluate market efficiency. The econometric approach consists of the estimation of a vector error correction model, using monthly beef real prices, for the period 1990-2019. Findings from this research provide information for decision-makers and stakeholders in this industry: these comprehend unidirectional transmission of international beef prices to domestic beef prices and from farm price to processor price. Also point to the existence of asymmetric price transmission, which is related to whether cattle and beef prices are increasing or decreasing. Results indicate that a long-run single cointegration relationship exists between international and farmer prices, and between processor and farm price. The direction of price transmission tends to go from producers to processors and from international price to farmer price. When the international price increases, the speed of adjustment tends to be significantly slower, in contrast to when the international price decreases, resulting in a significantly faster rate of adjustment.

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Section: Resultssupporting

confidence: 93%

Transmisión vertical y espacial de precios en el mercado mexicano e internacional de ganado vacuno

Villanueva

2022

Rev. Mex. Cienc. Pecu.

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“…Previous studies on asymmetric price transmission in the Thai economy were regarding the livestock industry (Barahona, Trejos, Lee, Chulaphan, & Jatuporn, 2014), aquaculture products (Singh, Dey, Laowapong, & Bastola, 2015), rice export prices (Ghoshray, 2008), and macroeconomic indicators (Rafiq, Salim, & Bloch, 2009). Importantly, a study by Barahona et al (2014) identified asymmetric price transmission in the pork industry, but price transmission appeared to be symmetric in the poultry industry. In contrast, Singh et al (2015) did not find any evidence of asymmetric price transmission in fish markets.…”

Section: Literature Reviewmentioning

confidence: 99%

Asymmetric adjustments in the Thai palm oil market

Songsiengchai

Sidique

Djama

et al. 2018

Kasetsart Journal of Social Sciences

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Drastic movements of global commodity prices and their impact on the Thai palm oil market is a major concern due to Thailand being the third largest producer of crude palm oil (CPO). Although the country is not a net importer, global price changes of the commodity can transmit to domestic markets for palm oil products. This paper analyzed the transmission of Malaysian CPO and world crude oil price changes to the changes in the Thai CPO price using an asymmetric error correction model. The price data used in this paper covers the period from January 1996 to September 2015. The findings showed that the speed of adjustments towards long-run equilibrium were asymmetric and the effects of the world prices on Thai CPO price were significant in both positive and negative deviations. This result calls for policy measures to mitigate the impact of global price movements because CPO is an essential intermediate input in various products and any changes in the Thai CPO price definitely affects the welfare of domestic consumers.

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“…Barahona et al [5] analyzed asymmetric price transmission in the artisan dairy industry of Honduras using Johansen multivariate approach and the Engle-Granger two step analyses. The study revealed that fluid milk prices have a strong co-integration with prices of fresh and dry cheese.…”

Section: Literature Reviewmentioning

confidence: 99%

Testing for Price Co-Integration between Producers and Retailers: Evidence from Ethiopian Milk Market

Lemma¹,

Singh²

2015

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The purpose of this paper is to test how producers' and retailers' prices are horizontally integrated, and to show the direction of causality that exists between producers' price and retails' price in Ethiopian milk market. The study was conducted making use of secondary data extracted from Ethiopian central statistics agency. The data was time series having 120 observations of monthly recorded price series of producers and retailers, for the period from January, 2004 to December 2013. For this purpose, descriptive statistics and time series econometrics approach (Johansen's test for co-integration and Vector Error Correction Model) were employed. The study shows that there is strong long run co-integration between producers' price and retailers' price. The policy implication is that the markets are co-integrated in terms of price transmission. However, the causality test shows that retailers are dominant over price determination. In other words, producer's price is caused by retailers' price; but producers' price doesn't cause retailers' price. This shows that the market structure is in favor of retailers/traders, which can adversely affect the welfare of producers and consumers.

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Asymmetric Price Transmission in the Livestock Industry of Thailand

Cited by 11 publications

References 6 publications

Transmisión vertical y espacial de precios en el mercado mexicano e internacional de ganado vacuno

Transmisión vertical y espacial de precios en el mercado mexicano e internacional de ganado vacuno

Asymmetric adjustments in the Thai palm oil market

Testing for Price Co-Integration between Producers and Retailers: Evidence from Ethiopian Milk Market

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