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Determining fluctuations and cycles of corn price in Iran

Author

Listed:
  • Behzad FAKARI

    (Department of Agricultural Economics, Ferdowsi University of Mashhad, Mashhad, Khorasan Razavi province, Iran)

  • Mohammad Mehdi FARSI

    (Department of Agricultural Economics, Ferdowsi University of Mashhad, Mashhad, Khorasan Razavi province, Iran)

  • Mostafa KOJOURI

    (Department of Agricultural Economics, Ferdowsi University of Mashhad, Mashhad, Khorasan Razavi province, Iran)

Abstract

Corn is the third important agricultural product. It is an important input in the poultry production and the basic elements of edible oil, starch, glucose, and raw material in industrial production of ethanol and some other products. The aim of this study is to find strategies to avoid price volatility, hence, the harmonic method has been used to investigate the corn price cycle and the GARCH model has been used to investigate its fluctuation. The harmonic method results showed long-term cycles in the period of 21 months in analyzing the period and the GARCH model result indicated that the corn price fluctuations causes more fluctuations in the corn future prices, in addition the error terms that have less contribution in the conditional variance. Based on the characteristics of the corn price variation obtained in this study, the policymakers should provide a proper condition to encourage sellers and buyers to deal in the Agricultural Mercantile Exchange and use future and option contract to control the price volatilities.

Suggested Citation

  • Behzad FAKARI & Mohammad Mehdi FARSI & Mostafa KOJOURI, 2013. "Determining fluctuations and cycles of corn price in Iran," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 59(8), pages 373-380.
    • Handle: RePEc:caa:jnlage:v:59:y:2013:i:8:id:141-2012-agricecon
    DOI: 10.17221/141/2012-AGRICECON
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    References listed on IDEAS

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    1. Zhao, Jieyuan & Goodwin, Barry K., 2011. "Volatility Spillovers in Agricultural Commodity Markets: An Application Involving Implied Volatilities from Options Markets," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103636, Agricultural and Applied Economics Association.
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    5. Jordaan, Henry & Grove, Bennie & Jooste, Andre & Alemu, A.G., 2007. "Measuring the Price Volatility of Certain Field Crops in South Africa using the ARCH/GARCH Approach," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 46(3), pages 1-17, September.
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    Cited by:

    1. 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.
    2. Dejan Živkov & Petra Balaban & Boris Kuzman, 2021. "How to combine precious metals with corn in a risk-minimizing two-asset portfolio?," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 67(2), pages 60-69.

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