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Thailand’s Market Power in Its Rice Export Markets

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  • Mahanaseth Itthipong

    (Department of Agricultural and Resource Economics, Faculty of Economics, Kasetsart University, Bangkok 10900, Thailand)

  • Tauer Loren W.

    (Charles H. Dyson School of Applied Economics and Management, Cornell University, Ithaca, NY 14850, USA)

Abstract

We measure the degree of market power Thailand has in its major rice export markets. Elasticities of residual demands for Thai rice for its important export destinations of China, Indonesia, USA, and South Africa were estimated and used as indicators of the degree of competition or market power in each respective market. Thai rice exports were classified into four categories consisting of aggregated white rice, Hommali rice, glutinous rice, and parboiled rice. For aggregated rice exports, the results reveal that Thailand does not have market power to influence export prices in its four major export markets. Instead, Thailand faces fierce competition from the rice-exporting countries of Vietnam and India, whose rice appears to be very close substitutes to Thai rice. Likewise, in the case of the disaggregated Hommali rice export market, Thailand does not possess market power. However, results indicate that Thailand has some market power in the glutinous rice export markets to China and Indonesia. Lastly, Thailand appears to have significant market power over parboiled rice export to South Africa. These results are useful in ongoing discussions of Thailand rice policies.

Suggested Citation

  • Mahanaseth Itthipong & Tauer Loren W., 2014. "Thailand’s Market Power in Its Rice Export Markets," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 12(1), pages 109-120, January.
    • Handle: RePEc:bpj:bjafio:v:12:y:2014:i:1:p:12:n:9
    DOI: 10.1515/jafio-2014-0003
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    References listed on IDEAS

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    1. Ngokkuen, Chuthaporn & Grote, Ulrike, 2012. "Geographical Indication for Jasmine Rice: Applying a Logit Model to Predict Adoption Behavior of Thai Farm Households," Quarterly Journal of International Agriculture, Humboldt-Universitaat zu Berlin, vol. 51(2), pages 1-29, May.
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    3. Yumkella, K. K. & Unnevehr, L. J. & Garcia, P., 1994. "Noncompetitive Pricing and Exchange Rate Pass-Through in Selected U.S. and Thai Rice Markets," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 26(2), pages 406-416, December.
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    2. Chen, Bo & Saghaian, Sayed, 2016. "Market Integration and Price Transmission in theWorld Rice Export Markets," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 41(3), pages 1-14.

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