IDEAS home Printed from https://ideas.repec.org/p/zbw/iamodp/187.html
   My bibliography  Save this paper

Spatial market efficiency of grain markets in Russia and global food security: A comparison with the USA

Author

Listed:
  • Svanidze, Miranda
  • Götz, Linde Johanna

Abstract

Using a threshold vector error correction model approach we find the wheat market of Russia segmented, with the primary grain export region poorly integrated into the domestic market. Results also indicate that trade costs are high, hindering spatial market efficiency of wheat markets in Russia. In addition, our study demonstrates that, by including the USA as benchmark country, a comparative approach enables a more comprehensive assessment of the spatial market efficiency of the wheat market in Russia. The study shows that the distinction between grain production and export potential, especially for markets located in peripheral regions of Russia, is essential to correctly identify Russia's future role for global food security. As a general conclusion, besides raising agricultural production potential it is also essential to strengthen spatial market efficiency in the agricultural sector to boost agricultural export potential and to increase global food security.

Suggested Citation

  • Svanidze, Miranda & Götz, Linde Johanna, 2019. "Spatial market efficiency of grain markets in Russia and global food security: A comparison with the USA," IAMO Discussion Papers 187, Leibniz Institute of Agricultural Development in Transition Economies (IAMO).
    • Handle: RePEc:zbw:iamodp:187
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/194573/1/1662406193.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. C. Le Mouël & A. Forslund, 2017. "How can we feed the world in 2050? A review of the responses from global scenario studies," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 44(4), pages 541-591.
    2. Hansen, Bruce E. & Seo, Byeongseon, 2002. "Testing for two-regime threshold cointegration in vector error-correction models," Journal of Econometrics, Elsevier, vol. 110(2), pages 293-318, October.
    3. Pier Giorgio Ardeni, 1989. "Does the Law of One Price Really Hold for Commodity Prices?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(3), pages 661-669.
    4. B. Wade Brorsen & Jean-Paul Chavas & Warren R. Grant & L. D. Schnake, 1985. "Marketing Margins and Price Uncertainty: The Case of the U.S. Wheat Market," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 67(3), pages 521-528.
    5. Götz, Linde & Djuric, Ivan & Nivievskyi, Oleg, 2016. "Regional wheat price effects of extreme weather events and wheat export controls in Russia and Ukraine [Regionale Weizenpreiseffekte von Wetterextremen und Weizenexportkontrollen in Russland und de," IAMO Discussion Papers 154, Leibniz Institute of Agricultural Development in Transition Economies (IAMO).
    6. Renner, Swetlana & Götz, Linde & Prehn, Sören & Glauben, Thomas, 2014. "The influence of infrastructure on regional wheat trade in Russia: A gravity model approach," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182840, European Association of Agricultural Economists.
    7. Schierhorn, Florian & Müller, Daniel & Prishchepov, Alexander V. & Faramarzi, Monireh & Balmann, Alfons, 2014. "The potential of Russia to increase its wheat production through cropland expansion and intensification," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 3(3-4), pages 133-141.
    8. repec:zbw:iamodp:235157 is not listed on IDEAS
    9. Barry K. Goodwin & Nicholas E. Piggott, 2001. "Spatial Market Integration in the Presence of Threshold Effects," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(2), pages 302-317.
    10. Barry K. Goodwin & Ted C. Schroeder, 1991. "Cointegration Tests and Spatial Price Linkages in Regional Cattle Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(2), pages 452-464.
    11. Christine Moser & Christopher Barrett & Bart Minten, 2009. "Spatial integration at multiple scales: rice markets in Madagascar," Agricultural Economics, International Association of Agricultural Economists, vol. 40(3), pages 281-294, May.
    12. Linde Götz & Ivan Djuric & Oleg Nivievskyi, 2016. "Regional Price Effects of Extreme Weather Events and Wheat Export Controls in Russia and Ukraine," Journal of Agricultural Economics, Wiley Blackwell, vol. 67(3), pages 741-763, September.
    13. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
    14. Raushan Bokusheva & Heinrich Hockmann, 2006. "Production risk and technical inefficiency in Russian agriculture," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 33(1), pages 93-118, March.
    15. Friederike Greb & Stephan von Cramon-Taubadel & Tatyana Krivobokova & Axel Munk, 2013. "The Estimation of Threshold Models in Price Transmission Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 95(4), pages 900-916.
    16. Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-1072, June.
    17. B. L. Gardner & G. C. Rausser (ed.), 2001. "Handbook of Agricultural Economics," Handbook of Agricultural Economics, Elsevier, edition 1, volume 1, number 2.
    18. Lesiv, Myroslava & Schepaschenko, Dmitry & Moltchanova, Elena & Bun, Rostyslav & Dürauer, Martina & Prishchepov, Alexander V. & Schierhorn, Florian & Estel, Stephan & Kuemmerle, Tobias & Alcántara, Ca, 2018. "Spatial distribution of arable and abandoned land across former Soviet Union countries," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 5, pages 1-12.
    19. Fackler, Paul L. & Goodwin, Barry K., 2001. "Spatial price analysis," Handbook of Agricultural Economics, in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 1, chapter 17, pages 971-1024, Elsevier.
    20. Martin Benirschka & James K. Binkley, 1995. "Optimal Storage and Marketing Over Space and Time," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(3), pages 512-524.
    21. B. L. Gardner & G. C. Rausser (ed.), 2001. "Handbook of Agricultural Economics," Handbook of Agricultural Economics, Elsevier, edition 1, volume 1, number 1.
    22. Emma C. Stephens & Edward Mabaya & Stephan von Cramon-Taubadel & Christopher B. Barrett, 2012. "Spatial Price Adjustment with and without Trade," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 74(3), pages 453-469, June.
    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. Svanidze, Miranda & Götz, Linde, 2019. "Determinants of spatial market efficiency of grain markets in Russia," Food Policy, Elsevier, vol. 89(C).
    2. Miranda Svanidze & Linde Götz & Ivan Djuric & Thomas Glauben, 2019. "Food security and the functioning of wheat markets in Eurasia: a comparative price transmission analysis for the countries of Central Asia and the South Caucasus," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 11(3), pages 733-752, June.
    3. repec:zbw:iamodp:285032 is not listed on IDEAS

    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. Svanidze, Miranda & Götz, Linde, 2019. "Spatial market efficiency of grain markets in Russia: Implications of high trade costs for export potential," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 21, pages 60-68.
    2. Svanidze, Miranda & Götz, Linde, 2019. "Determinants of spatial market efficiency of grain markets in Russia," Food Policy, Elsevier, vol. 89(C).
    3. Svanidze, Miranda & Götz, Linde & Djuric, Ivan & Glauben, Thomas, 2019. "Food security and the functioning of wheat markets in Eurasia: a comparative price transmission analysis for the countries of Central Asia and the South Caucasus," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 11(3), pages 733-752.
    4. repec:zbw:iamodp:285032 is not listed on IDEAS
    5. Kouyate, Carolin & von Cramon-Taubadel, Stephan & Fofana, Ismael, 2016. "Proximity and price co-movement in West African rice markets," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 11(3).
    6. Svanidze, Miranda & Götz, Linde, 2017. "How well is the Russian wheat market functioning? A comparison with the corn market in the USAHow well is the Russian wheat market functioning? A comparison with the corn market in the USA," 57th Annual Conference, Weihenstephan, Germany, September 13-15, 2017 262000, German Association of Agricultural Economists (GEWISOLA).
    7. Sahito, Jam Ghulam Murtaza, 2015. "Market integration of wheat in Pakistan," Discussion Papers 72, Justus Liebig University Giessen, Center for international Development and Environmental Research (ZEU).
    8. Brosig, Stephan & Yakhshilikov, Yorbol, 2005. "Interregional Integration Of Wheat Markets In Kazakhstan," IAMO Discussion Papers 14921, Institute of Agricultural Development in Transition Economies (IAMO).
    9. Miranda Svanidze & Ivan Đurić, 2021. "Global Wheat Market Dynamics: What Is the Role of the EU and the Black Sea Wheat Exporters?," Agriculture, MDPI, vol. 11(8), pages 1-13, August.
    10. Svanidze, Miranda & Goetz, Linde J., 2017. "How Well is the Russian Wheat Market Functioning? A Comparison with the Corn Market in the USA," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258114, Agricultural and Applied Economics Association.
    11. Svanidze, Miranda & Götz, Linde, 2017. "How well is the Russian wheat market functioning? A comparison with the corn market in the USA," 2017 International Congress, August 28-September 1, 2017, Parma, Italy 261434, European Association of Agricultural Economists.
    12. Svanidze, Miranda & Đurić, Ivan, 2021. "Global wheat market dynamics: What is the role of the EU and the Black Sea wheat exporters?," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 11(8).
    13. Heigermoser, Maximilian & Götz, Linde & Svanidze, Miranda, 2018. "Egypt’S Wheat Tenders – A Public Notice Board For Black Sea Grain Notations?," 58th Annual Conference, Kiel, Germany, September 12-14, 2018 275853, German Association of Agricultural Economists (GEWISOLA).
    14. Sekhar, C.S.C., 2012. "Agricultural market integration in India: An analysis of select commodities," Food Policy, Elsevier, vol. 37(3), pages 309-322.
    15. Van Campenhout, Bjorn, 2007. "Modelling trends in food market integration: Method and an application to Tanzanian maize markets," Food Policy, Elsevier, vol. 32(1), pages 112-127, February.
    16. Sergio H. Lence & GianCarlo Moschini & Fabio Gaetano Santeramo, 2018. "Threshold cointegration and spatial price transmission when expectations matter," Agricultural Economics, International Association of Agricultural Economists, vol. 49(1), pages 25-39, January.
    17. Nelissa Jamora & Stephan Cramon-Taubadel, 2016. "Transaction Cost Thresholds in International Rice Markets," Journal of Agricultural Economics, Wiley Blackwell, vol. 67(2), pages 292-307, June.
    18. Sungill Han & Chanjin Chung & Prasanna Surathkal, 2017. "Impacts of Increased Corn Ethanol Production on Price Asymmetry and Market Linkages in Fed Cattle Markets," Agribusiness, John Wiley & Sons, Ltd., vol. 33(3), pages 378-402, June.
    19. Isaac Abunyuwah & Henry De-Graft Acquah, 2013. "Modelling non-linear Spatial Market Integration and Equilibrium Processes in Hidden Markov Framework," Journal of Economics and Behavioral Studies, AMH International, vol. 5(8), pages 535-545.
    20. Luis Emilio Morales & Nam Hoang & Eric Stuen, 2017. "Spatial price premium transmission for Meat Standards Australia-graded cattle: the vulnerability of price premiums to outside shocks," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 61(4), pages 590-609, October.
    21. Ganneval, S., 2016. "Spatial price transmission on agricultural commodity markets under different volatility regimes," Economic Modelling, Elsevier, vol. 52(PA), pages 173-185.

    More about this item

    Keywords

    spatial market efficiency; grain production potential; Russia; TVECM; regularized Bayesian estimator;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:zbw:iamodp:187. 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: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/iamoode.html .

    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.