IDEAS home Printed from https://ideas.repec.org/p/ags/iamodp/14921.html
   My bibliography  Save this paper

Interregional Integration Of Wheat Markets In Kazakhstan

Author

Listed:
  • Brosig, Stephan
  • Yakhshilikov, Yorbol

Abstract

Reliable marketing opportunities in both interregional and international trade along with relatively low transportation [and transaction] costs are essential to profitability of wheat production. In this study we have investigated one aspect of the quality of marketing and trade opportunities in the Kazakh wheat sector, that is the extent and nature of integration among regional wheat markets. We applied threshold cointegration technique to assess the co-movement between time series of elevator prices at three grain-trading (and producing) spots in the northern and central parts of the country. Results suggest that markets of two northern grain trading spots (Petropavlovsk and Kokshetau) are closely connected with each other while their connection with Karaganda in central Kazakhstan is much weaker. Here, levelling out of price gaps through arbitrage trade only occurs after a threshold of considerable extent has been surpassed. ZUSAMMENFASSUNG Eine wichtige Voraussetzung für die Wirtschaftlichkeit der Getreideproduktion sind verlässliche Vermarktungswege, die interregionalen und internationalen Handel zu relativ geringen Transport- und Transaktionskosten zulassen. Die Studie behandelt die Integration regionaler Weizenmärkte miteinander und beleuchtet damit, wie reibungslos Getreidehandel zwischen diesen Regionen möglich ist. Mit Hilfe von Verfahren der threshold cointegration analysis werden Zusammenhänge in den Preisentwicklungen zwischen drei wichtigen Handelsplätzen in Nordund Zentralkasachstan untersucht. Die Märkte der beiden nördlichen Marktorte Petropavlovsk und Kokshetau stehen in enger Verbindung zueinander, während sie wesentlich unabhängiger von den Marktentwickungen im zentralkasachischen Karaganda sind. Ein Ausgleich von Preisunterschieden zwischen den nördlichen Märkten und Karaganda findet erst statt, wenn diese Unterschiede einen beträchtlichen Schwellenwert (threshold) übersteigen.

Suggested Citation

  • Brosig, Stephan & Yakhshilikov, Yorbol, 2005. "Interregional Integration Of Wheat Markets In Kazakhstan," IAMO Discussion Papers 14921, Institute of Agricultural Development in Transition Economies (IAMO).
  • Handle: RePEc:ags:iamodp:14921
    DOI: 10.22004/ag.econ.14921
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/14921/files/dp050088.pdf
    Download Restriction: no

    File URL: https://libkey.io/10.22004/ag.econ.14921?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Balke, Nathan S & Fomby, Thomas B, 1997. "Threshold Cointegration," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(3), pages 627-645, August.
    2. Hansen, Bruce E. & Seo, Byeongseon, 2002. "Testing for two-regime threshold cointegration in vector error-correction models," Journal of Econometrics, Elsevier, vol. 110(2), pages 293-318, October.
    3. Meyer, Jochen, 2004. "Measuring market integration in the presence of transaction costs--a threshold vector error correction approach," Agricultural Economics, Blackwell, vol. 31(2-3), pages 327-334, December.
    4. Bokusheva, Raushan & Heidelbach, Olaf, 2004. "Актуальные Аспекты Страхования В Сельском Хозяйстве [Current factors of insurance in agriculture]," IAMO Discussion Papers 57, Leibniz Institute of Agricultural Development in Transition Economies (IAMO).
    5. Osterwald-Lenum, Michael, 1992. "A Note with Quantiles of the Asymptotic Distribution of the Maximum Likelihood Cointegration Rank Test Statistics," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 54(3), pages 461-472, August.
    6. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    7. B. L. Gardner & G. C. Rausser (ed.), 2001. "Handbook of Agricultural Economics," Handbook of Agricultural Economics, Elsevier, edition 1, volume 1, number 2.
    8. Granger, C. W. J., 1981. "Some properties of time series data and their use in econometric model specification," Journal of Econometrics, Elsevier, vol. 16(1), pages 121-130, May.
    9. Mohammad Ismet & Andrew P. Barkley & Richard V. Llewelyn, 1998. "Government intervention and market integration in Indonesian rice markets," Agricultural Economics, International Association of Agricultural Economists, vol. 19(3), pages 283-295, December.
    10. Frohberg, Klaus & Hartmann, Monika, 1997. "Promoting CEA agricultural exports through association agreements with the EU: why it is not working," IAMO Discussion Papers 1, Leibniz Institute of Agricultural Development in Transition Economies (IAMO).
    11. Barry K. Goodwin & Nicholas E. Piggott, 2001. "Spatial Market Integration in the Presence of Threshold Effects," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(2), pages 302-317.
    12. Gloria González-Rivera & Steven M. Helfand, 2001. "The Extent, Pattern, and Degree of Market Integration: A Multivariate Approach for the Brazilian Rice Market," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(3), pages 576-592.
    13. Bob Baulch, 1997. "Transfer Costs, Spatial Arbitrage, and Testing for Food Market Integration," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(2), pages 477-487.
    14. Frohberg, Klaus & Hartmann, Monika, 1997. "Comparing measures of competitiveness," IAMO Discussion Papers 2, Leibniz Institute of Agricultural Development in Transition Economies (IAMO).
    15. Richard J. Sexton & Catherine L. Kling & Hoy F. Carman, 1991. "Market Integration, Efficiency of Arbitrage, and Imperfect Competition: Methodology and Application to U.S. Celery," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(3), pages 568-580.
    16. Longmire, James L. & Moldashev, Altynbeck, 1999. "Changing Competitiveness of the Wheat Sector of Kazakhstan and Sources of Future Productivity Growth," Economics Working Papers 7686, CIMMYT: International Maize and Wheat Improvement Center.
    17. Pier Giorgio Ardeni, 1989. "Does the Law of One Price Really Hold for Commodity Prices?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(3), pages 661-669.
    18. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
    19. Fackler, Paul L. & Goodwin, Barry K., 2001. "Spatial price analysis," Handbook of Agricultural Economics, in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 1, chapter 17, pages 971-1024, Elsevier.
    20. Spiller, Pablo T & Huang, Cliff J, 1986. "On the Extent of the Market: Wholesale Gasoline in the Northeastern United States," Journal of Industrial Economics, Wiley Blackwell, vol. 35(2), pages 131-145, December.
    21. B. L. Gardner & G. C. Rausser (ed.), 2001. "Handbook of Agricultural Economics," Handbook of Agricultural Economics, Elsevier, edition 1, volume 1, number 1.
    22. Barry K. Goodwin & Thomas J. Grennes & Christine McCurdy, 1999. "Spatial price dynamics and integration in russian food markets," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 3(2), pages 157-193.
    23. Scott Rozelle & Albert Park & Jikun Huang & Hehui Jin, 1997. "Liberalization and Rural Market Integration in China," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(2), pages 635-642.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Libman, Alexander, 2009. "Models of market integration in Central Asia – comparative performance," MPRA Paper 17510, University Library of Munich, Germany.
    2. Ilyasov, Jarilkasin & Goetz, Linde & Akramov, Kamiljon & Dorosh, Paul & Glauben, Thomas, 2015. "Market Integration and PRice Transmission in Tajikistan's Wheat Markets" Rising like rockets but falling like feathers?," 2015 Conference, August 9-14, 2015, Milan, Italy 211786, International Association of Agricultural Economists.
    3. Heidelbach, Olaf, 2007. "Efficiency of selected risk management instruments: An empirical analysis of risk reduction in Kazakhstani crop production," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 40, number 92323.
    4. Jarilkasin Ilyasov & Linde Götz & Kamiljon Akramov & Paul Dorosh & Thomas Glauben, 2016. "Market Integration and Price Transmission in Tajikistan’s Wheat Markets: Rising Like Rockets but Falling Like Feathers?," Working Papers id:11177, eSocialSciences.
    5. Gunnar Breustedt & Raushan Bokusheva & Olaf Heidelbach, 2008. "Evaluating the Potential of Index Insurance Schemes to Reduce Crop Yield Risk in an Arid Region," Journal of Agricultural Economics, Wiley Blackwell, vol. 59(2), pages 312-328, June.

    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. Sahito, Jam Ghulam Murtaza, 2015. "Market integration of wheat in Pakistan," Discussion Papers 72, Justus Liebig University Giessen, Center for international Development and Environmental Research (ZEU).
    2. Van Campenhout, Bjorn, 2007. "Modelling trends in food market integration: Method and an application to Tanzanian maize markets," Food Policy, Elsevier, vol. 32(1), pages 112-127, February.
    3. Isaac Abunyuwah & Henry De-Graft Acquah, 2013. "Modelling non-linear Spatial Market Integration and Equilibrium Processes in Hidden Markov Framework," Journal of Economics and Behavioral Studies, AMH International, vol. 5(8), pages 535-545.
    4. Varela, Gonzalo & Aldaz-Carroll, Enrique & Iacovone, Leonardo, 2012. "Determinants of market integration and price transmission in Indonesia," Policy Research Working Paper Series 6098, The World Bank.
    5. Alam, Mohammad Jahangir & McKenzie, Andrew M. & Buysse, Jeroen & Begum, Ismat Ara & Wailes, Eric J. & Van Huylenbroeck, Guido, 2012. "Measuring Market Integration in the Presence of Threshold Effect: The Case of Bangladesh Rice Markets," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124435, Agricultural and Applied Economics Association.
    6. Mohammad Jahangir Alam & Andrew M. McKenzie & Ismat Ara Begum & Jeroen Buysse & Eric J. Wailes & Md. Abdur Rouf Sarkar & Abdullah Al Mamun & Guido Huylenbroeck, 2022. "Spatial market integration of rice in Bangladesh in the presence of transaction cost," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 10(1), pages 1-21, December.
    7. Sekhar, C.S.C., 2012. "Agricultural market integration in India: An analysis of select commodities," Food Policy, Elsevier, vol. 37(3), pages 309-322.
    8. Ijambo, Bertha Deshimona, 2017. "An econometric analysis of spatial market integration and price formation in the Namibian sheep industry," Research Theses 334744, Collaborative Masters Program in Agricultural and Applied Economics.
    9. Svanidze, Miranda & Götz, Linde, 2019. "Spatial market efficiency of grain markets in Russia: Implications of high trade costs for export potential," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 21, pages 60-68.
    10. Badolo, Félix, 2012. "Chocs de prix internationaux et transmission : cas du marché du riz au Burkina Faso," L'Actualité Economique, Société Canadienne de Science Economique, vol. 88(3), pages 317-346, Septembre.
    11. Svanidze, Miranda & Götz, Linde Johanna, 2019. "Spatial market efficiency of grain markets in Russia and global food security: A comparison with the USA," IAMO Discussion Papers 187, Leibniz Institute of Agricultural Development in Transition Economies (IAMO).
    12. Ankamah-Yeboah, Isaac, 2012. "Spatial Price Transmission in the Regional Maize Markets in Ghana," MPRA Paper 49720, University Library of Munich, Germany.
    13. Pendell, Dustin L. & Schroeder, Ted C., 2006. "Impact of Mandatory Price Reporting on Fed Cattle Market Integration," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 31(3), pages 1-12, December.
    14. Listorti, Giulia & Esposti, Roberto, 2012. "Horizontal Price Transmission in Agricultural Markets: Fundamental Concepts and Open Empirical Issues," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 1(1), pages 1-28, April.
    15. Sergio H. Lence & GianCarlo Moschini & Fabio Gaetano Santeramo, 2018. "Threshold cointegration and spatial price transmission when expectations matter," Agricultural Economics, International Association of Agricultural Economists, vol. 49(1), pages 25-39, January.
    16. Kouyate, Carolin & von Cramon-Taubadel, Stephan & Fofana, Ismael, 2016. "Proximity and price co-movement in West African rice markets," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 11(3).
    17. Alam, Mohammad Jahangir & Begum, Ismat Ara, 2012. "World and Bangladesh Rice Market Integration: An Application of Threshold Cointegration and Threshold Vector Error Correction Model (TVECM)," 86th Annual Conference, April 16-18, 2012, Warwick University, Coventry, UK 135119, Agricultural Economics Society.
    18. Peri, Massimo & Baldi, Lucia, 2010. "Vegetable oil market and biofuel policy: An asymmetric cointegration approach," Energy Economics, Elsevier, vol. 32(3), pages 687-693, May.
    19. Barry K. Goodwin & Matthew T. Holt & Jeffrey P. Prestemon, 2021. "Semi-parametric models of spatial market integration," Empirical Economics, Springer, vol. 61(5), pages 2335-2361, November.
    20. Muhammad Sarwar Zahid & Abdul Qayyum & Wasim Shahid Malik, 2007. "Dynamics of Wheat Market Integration in Northern Punjab, Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 46(4), pages 817-830.

    More about this item

    Keywords

    Crop Production/Industries; Marketing;

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

    Statistics

    Access and download statistics

    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:ags:iamodp:14921. 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: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/iamoode.html .

    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.