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Supply response to changes in agricultural commodity prices in Asian countries

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  • Katsushi Imai
  • Raghav Gaiha
  • Ganesh Thapa

Abstract

The objective of the present study is to examine the extent to which the production of different agricultural commodities, namely, maize, wheat, rice, fruit, vegetable, and oilseeds, responds to price changes in selected Asian countries given the recent high and volatile agricultural prices. Our analysis confirms a strong positive yield response to higher prices in a panel of 10 Asian countries. However, there is considerable variation in the strength and speed of yield responses of these different commodities. We found that the yield response in the current period is strongest for oilseeds. The price of oil has a negative effect on yields of most of the commodities. For wheat, rice, vegetable, and oilseeds, the yield responses weakened after 2000. From a policy perspective, our analysis points to the potential of price policy in inducing a large supply of foodgrains given the high output elasticity of marketed supply.
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  • Katsushi Imai & Raghav Gaiha & Ganesh Thapa, 2008. "Supply response to changes in agricultural commodity prices in Asian countries," Economics Discussion Paper Series 0808, Economics, The University of Manchester.
    • Handle: RePEc:man:sespap:0808
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    References listed on IDEAS

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    Cited by:

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    2. Simrit Kaur, 2014. "Food entitlements, subsidies and right to food: a South Asian perspective," Chapters, in: Raghbendra Jha & Raghav Gaiha & Anil B. Deolalikar (ed.), Handbook on Food, chapter 19, pages 482-514, Edward Elgar Publishing.
    3. Poulomi BHATTACHARYA & Badri Narayan RATH & Aruna Kumar DASH, 2016. "Supply Response of Milk Production: Analysis and Implications for BRIC Countries," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 16(1).
    4. Mat Rahim, Siti Rohaya, 2014. "Asymmetric Cointegration: Barley and Crude Oil Price in United States," MPRA Paper 58447, University Library of Munich, Germany.
    5. Magrini, Emiliano & Morales-Opazo, Cristian & Balie, Jean, 2014. "Supply response along the value chain in selected SSA countries: the case of grains," 2014: Food, Resources and Conflict, December 7-9, 2014. San Diego, California 197193, International Agricultural Trade Research Consortium.
    6. Valenti, Daniele & Bertoni, Danilo & Cavicchioli, Davide & Olper, Alessandro, 2023. "Understanding the role of supply and demand factors in the global wheat market: a Structural Vector Autoregressive approach," FEEM Working Papers 338780, Fondazione Eni Enrico Mattei (FEEM).
    7. Eissa, Mohamad Abdelaziz & Al Refai, Hisham, 2019. "Modelling the symmetric and asymmetric relationships between oil prices and those of corn, barley, and rapeseed oil," Resources Policy, Elsevier, vol. 64(C).
    8. Powell, Robert J. & Vo, Duc H. & Pham, Thach N. & Singh, Abhay K., 2017. "The long and short of commodity tails and their relationship to Asian equity markets," Journal of Asian Economics, Elsevier, vol. 52(C), pages 32-44.
    9. Anbes Tenaye, 2020. "New Evidence Using a Dynamic Panel Data Approach: Cereal Supply Response in Smallholder Agriculture in Ethiopia," Economies, MDPI, vol. 8(3), pages 1-24, July.
    10. Thapa, Ganesh & Gaiha, Raghav Gaiha, 2012. "Food Security in Asia and the Pacific: The Role of Smallholders," Asian Journal of Agriculture and Development, Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA), vol. 9(1), pages 1-37, June.
    11. Katsushi Imai & Raghav Gaiha & Ganesh Thapa & Abdilahi Ali, 2011. "Re-examination of supply response to changes in food commodity prices in Asian countries," Economics Discussion Paper Series 1113, Economics, The University of Manchester.

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