IDEAS home Printed from https://ideas.repec.org/a/gam/jagris/v15y2025i6p587-d1609284.html
   My bibliography  Save this article

Evaluating the Impact of Location Differentials on Soybean Futures in South Africa: Price Dynamics and Silo Re-Deliveries

Author

Listed:
  • Daniel Mokatsanyane

    (School of Economics and Management Sciences, North West University, Vanderbijlpark 1900, South Africa)

  • Mariette Geyser

    (School of Economics and Management Sciences, North West University, Potchefstroom 2520, South Africa)

  • Anmar Pretorius

    (School of Economics and Management Sciences, North West University, Potchefstroom 2520, South Africa)

Abstract

This study examined the impact of location differentials (LDs) on soybean futures trading in South Africa. This study uses a systematic approach, employing the Autoregressive Moving Average (ARMA) and Generalized Autoregressive Conditional Heteroskedasticity (GARCH) models to analyze relationships between soybean futures prices and LDs. The results suggest that LDs have caused price stabilization for most of the contract months, while the variability and occasional extremes in the spot price increased. Post-LD analysis showed that the volatility was lower, with a normalization of price structures, but, still, regional disparities were driven by transport costs and logistical issues. LDs also affected silo utilization, and the rates of re-delivery differed among regions, reflecting local market dynamics and operational efficiencies. This, in essence, suggests that LDs act to enhance the predictability of markets and price harmonization; LDs also equally require concerted interventions in regional disparities and optimization of market performances. Future studies need to determine the impact that LDs, over a long period, have on market efficiency, regional trade, and general economy-wide indicators like farmers’ incomes and rural development.

Suggested Citation

  • Daniel Mokatsanyane & Mariette Geyser & Anmar Pretorius, 2025. "Evaluating the Impact of Location Differentials on Soybean Futures in South Africa: Price Dynamics and Silo Re-Deliveries," Agriculture, MDPI, vol. 15(6), pages 1-24, March.
    • Handle: RePEc:gam:jagris:v:15:y:2025:i:6:p:587-:d:1609284
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2077-0472/15/6/587/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2077-0472/15/6/587/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Douglas Gollin & Christopher Udry, 2021. "Heterogeneity, Measurement Error, and Misallocation: Evidence from African Agriculture," Journal of Political Economy, University of Chicago Press, vol. 129(1), pages 1-80.
    2. Harwood, Joy L. & Heifner, Richard G. & Coble, Keith H. & Perry, Janet E. & Somwaru, Agapi, 1999. "Managing Risk in Farming: Concepts, Research, and Analysis," Agricultural Economic Reports 34081, United States Department of Agriculture, Economic Research Service.
    3. Christopher Ugochukwu Nwafor & Abiodun A. Ogundeji & Carlu van der Westhuizen, 2020. "Adoption of ICT-Based Information Sources and Market Participation among Smallholder Livestock Farmers in South Africa," Agriculture, MDPI, vol. 10(2), pages 1-13, February.
    4. Harold Hotelling, 1931. "The Economics of Exhaustible Resources," Journal of Political Economy, University of Chicago Press, vol. 39(2), pages 137-137.
    5. Valdes, Constanza & Gillespie, Jeffrey & Dohlman, Erik, 2023. "Soybean Production, Marketing Costs, and Export Competitiveness in Brazil and the United States," Economic Information Bulletin 340506, United States Department of Agriculture, Economic Research Service.
    6. Acharya, S.S., 1998. "Agricultural Marketing in India: Some Facts and Emerging Issues," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 53(3), September.
    Full references (including those not matched with items 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. Seiler, Volker, 2024. "The relationship between Chinese and FOB prices of rare earth elements – Evidence in the time and frequency domain," The Quarterly Review of Economics and Finance, Elsevier, vol. 95(C), pages 160-179.
    2. Burda, Michael C. & Zessner-Spitzenberg, Leopold, 2024. "Greenhouse Gas Mitigation and Price-Driven Growth in a Solow-Swan Economy with an Environmental Limit," IZA Discussion Papers 16771, Institute of Labor Economics (IZA).
    3. Dale W. Henderson & Stephen W. Salant, 1976. "Market anticipations, government policy, and the price of gold," International Finance Discussion Papers 81, Board of Governors of the Federal Reserve System (U.S.).
    4. Hala Abu-Kalla & Ruslana Rachel Palatnik & Ofira Ayalon & Mordechai Shechter, 2020. "Hoard or Exploit? Intergenerational Allocation of Exhaustible Natural Resources," Energies, MDPI, vol. 13(24), pages 1-20, December.
    5. John Baffes & Cristina Savescu, 2014. "Monetary conditions and metal prices," Applied Economics Letters, Taylor & Francis Journals, vol. 21(7), pages 447-452, May.
    6. Dubois, Loick & Sahuc, Jean-Guillaume & Vermandel, Gauthier, 2025. "A general equilibrium approach to carbon permit banking," Journal of Environmental Economics and Management, Elsevier, vol. 129(C).
    7. Siebert, Horst, 1982. "Das intertemporale Angebot eines ressourcenabbauenden Unternehmens," Open Access Publications from Kiel Institute for the World Economy 3563, Kiel Institute for the World Economy (IfW Kiel).
    8. Paul Welfens & Jens Perret & Deniz Erdem, 2010. "Global economic sustainability indicator: analysis and policy options for the Copenhagen process," International Economics and Economic Policy, Springer, vol. 7(2), pages 153-185, August.
    9. Eduardo Ley & Molly K. Macauley & Stephen W. Salant, "undated". "Spatially and intertemporally efficient waste management: The costs of interstate flow control," Working Papers 97-07, FEDEA.
    10. Firdu Gemech & Sushil Mohan & Alan Reeves & John Struthers, 2011. "Market-Based Price-Risk Management: Welfare Gains for Coffee Producers from Efficient Allocation of Resources," Oxford Development Studies, Taylor & Francis Journals, vol. 39(1), pages 49-68.
    11. Haugom, Erik & Mydland, Ørjan & Pichler, Alois, 2016. "Long term oil prices," Energy Economics, Elsevier, vol. 58(C), pages 84-94.
    12. Devarajan, Shantayanan & Fisher, Anthony C, 1981. "Hotelling's "Economics of Exhaustible Resources": Fifty Years Later," Journal of Economic Literature, American Economic Association, vol. 19(1), pages 65-73, March.
    13. Cai, Yiyong & Newth, David & Finnigan, John & Gunasekera, Don, 2015. "A hybrid energy-economy model for global integrated assessment of climate change, carbon mitigation and energy transformation," Applied Energy, Elsevier, vol. 148(C), pages 381-395.
    14. Pfeiffer, Lisa & Lin, C.-Y. Cynthia, 2012. "Groundwater pumping and spatial externalities in agriculture," Journal of Environmental Economics and Management, Elsevier, vol. 64(1), pages 16-30.
    15. Grimaud, Andre & Rouge, Luc, 2005. "Polluting non-renewable resources, innovation and growth: welfare and environmental policy," Resource and Energy Economics, Elsevier, vol. 27(2), pages 109-129, June.
    16. Seyhan, Demet & Weikard, Hans-Peter & van Ierland, Ekko, 2012. "An economic model of long-term phosphorus extraction and recycling," Resources, Conservation & Recycling, Elsevier, vol. 61(C), pages 103-108.
    17. Leach, Andrew & Mason, Charles F. & Veld, Klaas van ‘t, 2011. "Co-optimization of enhanced oil recovery and carbon sequestration," Resource and Energy Economics, Elsevier, vol. 33(4), pages 893-912.
    18. Brent A. Gloy & Timothy G. Baker, 2002. "The Importance of Financial Leverage and Risk Aversion in Risk-Management Strategy Selection," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(4), pages 1130-1143.
    19. Cécile Couharde & Vincent Géronimi & Armand Taranco, 2012. "Les hausses récentes des cours des matières premières traduisent-elles l'entrée dans un régime de prix plus élevés ?," Revue Tiers-Monde, Armand Colin, vol. 0(3), pages 13-34.
    20. John Boyce & Jeffrey Robert Church & Lucia Vojtassak, "undated". "Capacity Constraints in Durable Goods Monopoly: Coase and Hotelling," Working Papers 2012-07, Department of Economics, University of Calgary, revised 08 Aug 2012.

    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:gam:jagris:v:15:y:2025:i:6:p:587-:d:1609284. 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.