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Evaluation of Rice Markets Integration in Bangladesh

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  • Mohammad Ismail Hossain

    () (Department of Agricultural Economics, Faculty of Agriculture, Aristotle University of Thessaloniki, Greece.)

  • Wim Verbeke

    () (Department of Agricultural Economics, Faculty of Bioscience Engineering, Ghent University, Belgium.)

Abstract

The liberalization of the agricultural sector in general and the rice subsector in particular has been a major component of Bangladesh’s structural adjustment program initiated in 1992. However, the government has continued to intervene in the rice subsector. This paper examines whether the regional/divisional rice markets have become spatially integrated following the liberalization of the rice market. Wholesale weekly coarse rice prices at six divisional levels over the period of January 2004 to November 2006 were used to test the degree of market integration in Bangladesh using co-integration analysis and a vector error correction model (VECM). The Johansen co-integration test indicated that there are at least three co-integrating vectors implying that rice markets in Bangladesh during the study period are moderately linked together and therefore the long-run equilibrium is stable. The short-run market integration as measured by the magnitude of market interdependence and the speed of price transmission between the divisional markets has been weak.

Suggested Citation

  • Mohammad Ismail Hossain & Wim Verbeke, 2010. "Evaluation of Rice Markets Integration in Bangladesh," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 15(2), pages 77-96, Jul-Dec.
  • Handle: RePEc:lje:journl:v:15:y:2010:i:2:p:77-96
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    References listed on IDEAS

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    Cited by:

    1. Adom, Philip Kofi, 2014. "Determination Of Spatial Integration And Substitution Of Foreign Rice For Local Rice In Ghana," Review of Agricultural and Applied Economics (RAAE), Faculty of Economics and Management, Slovak Agricultural University in Nitra Provider-Homepage: http://www.roaae.org;Association of Agricultural Economists in Slovakia (APES), vol. 17(2).
    2. Akpan, S.B. & Udoka, S. J. & Inimfon, V. P., 2016. "Assessment of Rice Market Competiveness Using Horizontal Price Transmission: Empirical Evidence from Southern Region of Nigeria," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 8(2), June.
    3. repec:spr:agfoec:v:6:y:2018:i:1:d:10.1186_s40100-018-0097-1 is not listed on IDEAS
    4. Talukder, Dayal & Chile, Love, 2014. "Characteristics of Rice Cultivation and Rural Rice Market in Bangladesh: Evidence from a Survey," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 15(2), June.
    5. Ankamah-Yeboah, Isaac, 2012. "Spatial Price Transmission in the Regional Maize Markets in Ghana," MPRA Paper 49720, University Library of Munich, Germany.

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