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Market integration and spatial price transmission in grain markets of Turkey

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  • Ozcan Ozturk

Abstract

This paper examines whether the grain market of Turkey is cointegrated with the world grain market. Using an error correction model, we analyse the response of producer prices of wheat, barley, maize, soybean and rice to changes in world market prices. Results show that the rice market of Turkey is not cointegrated with the world rice market, while the other commodity markets are weakly cointegrated. Results also show that pass-through of changes in the world prices to the domestic prices is relatively low both in the short run and in the long run, and that adjustment to the new equilibrium following a shock is slow. Government intervention policies both at the border and as domestic price supports seem to be underlying causes of the weak cointegration. Fewer protectionist policies and lower levels of government intervention are necessary to increase the domestic grain market integration with the international grain market.

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  • Ozcan Ozturk, 2020. "Market integration and spatial price transmission in grain markets of Turkey," Applied Economics, Taylor & Francis Journals, vol. 52(18), pages 1936-1948, April.
    • Handle: RePEc:taf:applec:v:52:y:2020:i:18:p:1936-1948
    DOI: 10.1080/00036846.2020.1726862
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    Cited by:

    1. Nzuma, Jonathan Makau & Kirui, Patrick Kipruto, 2021. "Transmission of global wheat prices to domestic markets in Kenya: A cointegration approach," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 16(1), March.
    2. Prince, Ehsanur Rauf & Barmon, Basanta Kumar & Islam, Teresa, 2022. "An Investigation into the Spatial Rice Market Integration in Bangladesh: Application of Vector Error Correction Approach," MPRA Paper 115927, University Library of Munich, Germany.

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