Advanced Search
MyIDEAS: Login to save this article or follow this journal

The world market for soybeans: price transmission into Brazil and effects from the timing of crop and trade

Contents:

Author Info

  • Mario A. Margarido

    (IEA)

  • Frederico A. Turolla

    (ESPM)

  • Carlos R. F. Bueno

    (IEA)

Registered author(s):

    Abstract

    This paper investigates the price transmission in the world market for soybeans using time series econometrics models. The theoretical model developed by Mundlack and Larson (1992) is based on the Law of the One Price, which assumes price equalization across all local markets in the long run and allows for deviations in the short run. The international market was characterized by three relevant soybean prices: Rotterdam Port, Argentina and the United States. The paper estimates the elasticity of transmission of these prices into soybean prices in Brazil. There were carried causality and cointegration tests in order to identify whether there is significant long-term relationship among these variables. There was also calculated the impulse-response function and forecast error variance decomposition to analyze the transmission of variations in the international prices over Brazilian prices. An exogeneity test was also carried out so as to check whether the variables respond to short term deviations from equilibrium values. Results validated the Law of the One Price in the long run. In line with many studies, this paper showed that Brazil and Argentina can be seen as price takers as long as the speed of their adjustment to shocks is faster than in the United States, the latter being a price maker.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.scielo.br/scielo.php?script=sci_pdf&pid=S0103-63512007000200002&lng=en&nrm=iso&tlng=en
    Download Restriction: no

    Bibliographic Info

    Article provided by Economics Department, Universidade Federal de Minas Gerais (Brazil) in its journal Nova Economia.

    Volume (Year): 17 (2007)
    Issue (Month): 2 (May-August)
    Pages: 241-270

    as in new window
    Handle: RePEc:nov:artigo:v:17:y:2007:i:2:p:241-270

    Contact details of provider:
    Postal: Av. Antonio Carlos, 6627 - Predio da FACE Belo Horizonte, 31270-901 Brazil
    Phone: +55 31 3409-7000
    Email:
    Web page: http://www.face.ufmg.br/
    More information through EDIRC

    Order Information:
    Postal: Av. Antonio Carlos, 6627 - Predio da FACE Belo Horizonte, 31270-901 Brazil
    Email:
    Web: http://www.face.ufmg.br/novaeconomia/

    Related research

    Keywords: soy; elasticity of price transmission; time series econometrics;

    Find related papers by JEL classification:

    References

    No references listed on IDEAS
    You can help add them by filling out this form.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Acosta, Alejandro, 2012. "Measuring spatial transmission of white maize prices between South Africa and Mozambique: An asymmetric error correction model approach," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 7(1), October.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:nov:artigo:v:17:y:2007:i:2:p:241-270. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sibelle Diniz).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.