IDEAS home Printed from https://ideas.repec.org/a/taf/rjapxx/v17y2012i1p113-126.html
   My bibliography  Save this article

The dynamic relationships between world and domestic prices of rice under the regime of agricultural trade liberalization in Bangladesh

Author

Listed:
  • Mohammad Alam
  • Jeroen Buysse
  • Andrew McKenzie
  • Ismat Begum
  • Eric Wailes
  • Guido Van Huylenbroeck

Abstract

The article examines the dynamic relationship between the world and the domestic market price of rice for Bangladesh given agricultural trade liberalization. A Johansen multivariate cointegration test was used, followed by an error correction model. Results show that there exists a long-run unidirectional equilibrium relationship, meaning that the domestic prices adjust to the world prices but not vice versa. Our results highlight the dependence of the Bangladeshi rice market on the world rice market and underline the need for adequate policies which specifically address the issue of food security when world prices are very high. The goal of such policies should be to dampen or reduce domestic price volatility induced by the world market.

Suggested Citation

  • Mohammad Alam & Jeroen Buysse & Andrew McKenzie & Ismat Begum & Eric Wailes & Guido Van Huylenbroeck, 2012. "The dynamic relationships between world and domestic prices of rice under the regime of agricultural trade liberalization in Bangladesh," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 17(1), pages 113-126.
    • Handle: RePEc:taf:rjapxx:v:17:y:2012:i:1:p:113-126
    DOI: 10.1080/13547860.2012.640010
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/13547860.2012.640010
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/13547860.2012.640010?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Morisset, Jacques, 1997. "Unfair trade? Empirical evidence in world commodity markets over te past 25 years," Policy Research Working Paper Series 1815, The World Bank.
    2. Raihan, Selim & Razzaque, Mohammad A, 2007. "WTO and regional trade negotiation outcomes: quantitative assessments of potential implications on Bangladesh," MPRA Paper 38475, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Kim, Man-Keun & Tejeda, Hernan & Wright, Jeffrey, 2016. "Price Discovery in the U.S. Milled Rice Markets using a Cluster Analysis and Tournament," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235725, Agricultural and Applied Economics Association.
    2. Alam, Mohammad Jahangir & Begum, Ismat Ara, 2012. "World and Bangladesh Rice Market Integration: An Application of Threshold Cointegration and Threshold Vector Error Correction Model (TVECM)," 86th Annual Conference, April 16-18, 2012, Warwick University, Coventry, UK 135119, Agricultural Economics Society.
    3. Mohammad Jahangir Alam & Andrew M. McKenzie & Ismat Ara Begum & Jeroen Buysse & Eric J. Wailes & Md. Abdur Rouf Sarkar & Abdullah Al Mamun & Guido Huylenbroeck, 2022. "Spatial market integration of rice in Bangladesh in the presence of transaction cost," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 10(1), pages 1-21, December.
    4. Shuai Liu & Dingyu Liu & Sibo Ge, 2024. "Impact of external shocks on international corn price fluctuations," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 70(1), pages 1-11.
    5. Florence Oluremi Okeowo & Rafiu Adewale Aregbeshola, 2018. "Trade Liberalization and Performance of the Nigerian Textile Industry," Journal of Economics and Behavioral Studies, AMH International, vol. 10(2), pages 33-47.
    6. Harold Glenn A. Valera & Mark J. Holmes & Valerien O. Pede & Jean Balié, 2023. "How convergent are rice export prices in the international market?," Agricultural Economics, International Association of Agricultural Economists, vol. 54(1), pages 127-141, January.
    7. Mohammad Jahangir Alam & Andrew M. McKenzie & Ismat Ara Begum & Jeroen Buysse & Eric J. Wailes & Guido Huylenbroeck, 2016. "Asymmetry Price Transmission in the Deregulated Rice Markets in Bangladesh: Asymmetric Error Correction Model," Agribusiness, John Wiley & Sons, Ltd., vol. 32(4), pages 498-511, November.
    8. Ashrafun Nahar & Jeff Luckstead & Eric J. Wailes & Mohammad Jahangir Alam, 2018. "An assessment of the potential impact of climate change on rice farmers and markets in Bangladesh," Climatic Change, Springer, vol. 150(3), pages 289-304, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alam, Mohammad Jahangir & Begum, Ismat Ara, 2012. "World and Bangladesh Rice Market Integration: An Application of Threshold Cointegration and Threshold Vector Error Correction Model (TVECM)," 86th Annual Conference, April 16-18, 2012, Warwick University, Coventry, UK 135119, Agricultural Economics Society.
    2. De, Prabir & Raihan, Selim & Kathuria, Sanjay, 2012. "Unlocking Bangladesh-India trade : emerging potential and the way forward," Policy Research Working Paper Series 6155, The World Bank.
    3. Mustafizur Rahman & Towfiqul Islam Khan & Ashiqun Nabi & Tapas Kumar Paul, 2010. "Bangladesh's Export Opportunities in the Indian Market : Addressing Barriers and Strategies for Future," Trade Working Papers 23060, East Asian Bureau of Economic Research.
    4. Dirk Kohnert, 2018. "Trump's tariff impact on Africa and the ambiguous role of African agency," Review of African Political Economy, Taylor & Francis Journals, vol. 45(157), pages 451-466, July.
    5. Raihan, Selim, 2012. "SAFTA and the South Asian Countries: Quantitative Assessments of Potential Implications," MPRA Paper 37884, University Library of Munich, Germany.
    6. Schmidt, Carla Maria & Saes, Maria Sylvia Macchione & Fowler de Ávila Monteiro, Guilherme, 2014. "Value Creation And Value Appropriation In Networks: An Empirical Analysis Of The Role Of Geographical Indication In The Wine Industry In Vale Dos Vinhedos, Rs, Brazil," Organizações Rurais e Agroindustriais/Rural and Agro-Industrial Organizations, Universidade Federal de Lavras, Departamento de Administracao e Economia, vol. 16(3), December.
    7. Kang, Hyunsoo & Kennedy, P. Lynn, 2009. "Empirical Evidences from a Coffee Paradox: An Export Supply/Price Asymmetry Approach," Journal of Rural Development/Nongchon-Gyeongje, Korea Rural Economic Institute, vol. 32(3), pages 1-31, July.
    8. Raihan, Selim, 2011. "Economic Corridors in South Asia: Exploring the Benefits of Market Access and Trade Facilitation," MPRA Paper 37883, University Library of Munich, Germany.
    9. Ge, Jianping & Lei, Yalin & Tokunaga, Suminori, 2014. "Non-grain fuel ethanol expansion and its effects on food security: A computable general equilibrium analysis for China," Energy, Elsevier, vol. 65(C), pages 346-356.
    10. Durevall, Dick, 2007. "Demand for coffee in Sweden: The role of prices, preferences and market power," Food Policy, Elsevier, vol. 32(5-6), pages 566-584.
    11. Mustafizur Rahman & Towfiqul Islam Khan & Ashiqun Nabi & Tapas Kumar Paul, 2011. "Bangladesh’s Export Opportunities in the Indian Market," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 12(1), pages 117-141, March.
    12. Md. Joynal Abdin, 2009. "An Analysis of SAFTA in the Context of Bangladesh," Bangladesh Development Research Working Paper Series (BDRWPS) BDRWPS No. 6, Bangladesh Development Research Center (BDRC).
    13. Ben Shepherd, 2005. "Market Power in International Commodity Processing Chains: Preliminary Results from the Coffee Market," International Trade 0511013, University Library of Munich, Germany.
    14. Alam, Md. Mahmudul & Uddin, Gazi Salah & Taufique, Khan Md. Raziuddin, 2019. "Import Inflows of Bangladesh: The Gravity Model Approach," SocArXiv etmzk, Center for Open Science.
    15. Hansa Jain, 2019. "Implications of SAFTA for Indian Economy: Trade, Compatibility and Welfare Effects," Foreign Trade Review, , vol. 54(4), pages 355-374, November.
    16. Alam, Mohammad Jahangir & Bhuiyan, Nazmul & Begum, Ismat Ara & Van Huylenbroeck, Guido, 2012. "Tracing the Poverty Impact of Market Reforms in Bangladesh," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 123758, International Association of Agricultural Economists.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:rjapxx:v:17:y:2012:i:1:p:113-126. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/rjap .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.