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Spatial Price Dynamics and Asymmetric Price Transmission in Skim Milk Powder International Trade: Evidence from Export Prices for New Zealand and Ireland

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  • Huidan Xue

    (School of Economics and Management, Beijing University of Technology, Beijing 100124, China)

  • Chenguang Li

    (School of Agriculture and Food Science, University College Dublin, Belfield, Dublin 4, Ireland)

  • Liming Wang

    (School of Economics and Management, Beijing University of Technology, Beijing 100124, China
    Irish Institute for Chinese Studies, University College Dublin, Belfield, Dublin 4, Ireland)

Abstract

A fast-changing global landscape highlights the importance of understanding spatial price dynamics in key international markets such as China, especially in the era of COVID-19 pandemic with international food trade and food system experiencing an unprecedented challenge. Nowadays, New Zealand’s dominant position in China’s dairy import market is being challenged by European Union (EU) dairy exporters leading to intensified market competition. Using monthly export data of skim milk powder (SMP), we applied threshold cointegration models along with asymmetric error correction models to examine spatial price dynamics and price transmissions of New Zealand and Ireland in Chinese and global markets. We found that New Zealand’s export prices retain their leadership position in China, Ireland’s export prices are well more aligned with those in international markets. In terms of own-country price transmission, Ireland’s relatively symmetric and swift adjustments were found to contrast with New Zealand’s SMP export prices, which displayed more asymmetric price transmissions.

Suggested Citation

  • Huidan Xue & Chenguang Li & Liming Wang, 2021. "Spatial Price Dynamics and Asymmetric Price Transmission in Skim Milk Powder International Trade: Evidence from Export Prices for New Zealand and Ireland," Agriculture, MDPI, vol. 11(9), pages 1-20, September.
    • Handle: RePEc:gam:jagris:v:11:y:2021:i:9:p:860-:d:631409
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    References listed on IDEAS

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    2. Sergei Kharin & Zuzana Kapustova & Ivan Lichner, 2023. "Price transmission between maize and poultry product markets in the Visegrád Group countries: What is more nonlinear, egg or chicken?," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 69(12), pages 510-522.

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