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Market Power in International Commodity Processing Chains: Preliminary Results from the Coffee Market

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Author Info
Ben Shepherd (Groupe d'Économie Mondiale)

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Abstract

Vector autoregressions are used to model price transmission through the coffee processing chain, from producers to the world market and from the world market to consumers. A comparison is made of price dynamics against a backdrop of two very different market structures: pre-1989, producers exerted market power through export quotas and state- controlled marketing channels; post-1989, government interventions are minimal, but private actors at intermediary, processing and retailing levels have become quite concentrated. Interestingly, the analysis shows that liberalisation has not improved price transmission as significantly as expected and in some respects appears to have worsened it noticeably. One possible explanation is market power amongst private actors at intermediate levels in the processing chain.

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Paper provided by EconWPA in its series International Trade with number 0511013.

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Length: 38 pages
Date of creation: 24 Nov 2005
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Handle: RePEc:wpa:wuwpit:0511013

Note: Type of Document - pdf; pages: 38
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Web page: http://129.3.20.41

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Related research
Keywords: Vector Autoregression; Market Power; International Trade; Commodity Market Liberalisation; Coffee.;

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Find related papers by JEL classification:
C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions
L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade

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References listed on IDEAS
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