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

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  • Maximilian Heigermoser
  • Linde Götz
  • Miranda Svanidze

Abstract

Black Sea wheat exporters, led by Russia, dominate Egypt's wheat imports via a tender system. The tenders are managed by the GASC and their outcomes are communicated worldwide by financial news agencies. Building on a transaction‐specific dataset on GASC tenders (2011 ‐ 2019), results of our cointegration analysis find wheat export markets of Russia, France and the USA highly integrated with the GASC tender price. Estimates from the multivariate VECM indicate strong price interdependencies between the GASC tender price and Russian and French export prices, indicating fierce competition in the GASC tender market. Despite the high market share of wheat exporters in the Black Sea region and Russia in particular, tests on weak exogeneity suggest a leading role of the French wheat export price. We further find that leadership of US wheat prices is weak in the GASC tender market.

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  • Maximilian Heigermoser & Linde Götz & Miranda Svanidze, 2021. "Price formation within Egypt's wheat tender market: Implications for Black Sea exporters," Agricultural Economics, International Association of Agricultural Economists, vol. 52(5), pages 819-831, September.
    • Handle: RePEc:bla:agecon:v:52:y:2021:i:5:p:819-831
    DOI: 10.1111/agec.12656
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    2. Abay, Kibrom & Abdelfattah, Lina Alaaeldin & Breisinger, Clemens & Siddig, Khalid H. A., 2023. "Evaluating Cereal Market (Dis)Integration in Less Developed and Fragile Markets: The Case of Sudan," 2023 Annual Meeting, July 23-25, Washington D.C. 335634, Agricultural and Applied Economics Association.
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