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Long Run Relationship and Structural Change Between the US and EU Wheat Export Prices


  • Marco Barassi
  • Atanu Ghoshray


This paper studies the long run price relationships between two major wheat exporters in the world wheat market. Since the emergence of the EU as a major wheat exporter, the competition between the EU and the US has been fierce for a larger share of world wheat exports. One would expect through arbitrage and substitution the price of EU and US wheat would move together. Time series analysis is used to obtain information regarding the long run relationship between the US and the EU wheat prices. The results provide evidence of no linkages in the period prior to the implementation of the CAP reform. However, clear evidence of a long run relationship is found after the CAP reforms were implemented. In the long run the US soft wheat price seems to be acting as price leader for EU wheat. These results provide evidence that the EU and US wheat markets have apparently become more integrated in the post 1992 CAP reform period with EU prices showing a steady convergence towards US prices which may be a result of policy reform.

Suggested Citation

  • Marco Barassi & Atanu Ghoshray, "undated". "Long Run Relationship and Structural Change Between the US and EU Wheat Export Prices," Discussion Papers 05-06, Department of Economics, University of Birmingham.
  • Handle: RePEc:bir:birmec:05-06

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    Cited by:

    1. Goetz, Linde & Glauben, Thomas & Brümmer, Bernhard, 2010. "Impacts of Export Controls On Wheat Markets During the Food Crisis 2007/2008 in Russia and Ukraine," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61626, Agricultural and Applied Economics Association.
    2. Goetz, Linde & Glauben, Thomas & Brümmer, Bernhard, 2010. "How Did Policy Interventions In Wheat Export Markets In Russia And Ukraine During The Food Crisis 2007/2008 Influence World Market Price Transmission?," 50th Annual Conference, Braunschweig, Germany, September 29-October 1, 2010 93952, German Association of Agricultural Economists (GEWISOLA).

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