Should traders be blamed for soaring food prices in Ethiopia? Evidence from wholesale maize markets
In: International Food and Agribusiness Management ReviewSearch for other papers by Mesay Yami in
Current site
Google Scholar
Search for other papers by Ferdi Meyer in
Current site
Google Scholar
Search for other papers by Rashid Hassan in
Current site
Google Scholar
The prevalence of imperfect price transmission in the agricultural food markets continues to be an important policy concern for most countries in Africa. Motivated by the coexistence of soaring food prices and high domestic food production, this article investigates the performance of wholesale white maize markets in Ethiopia during the post-agricultural market liberalization period. The presence of price manipulation in the grain market structure has important welfare implications as it impedes the full transmission of price reductions and increases among marketing intermediaries. Results indicate that regional maize markets adjusted more quickly to price decreases than price increases to the central Addis Ababa wholesale maize market prices, suggesting the absence of positive asymmetric price transmission. Our findings are in contrast with existing studies conducted in southern, western and eastern Africa major food commodity markets.
-
Abdulai, A. 2000. Spatial price transmission and asymmetry in the Ghanaian maize market. Journal of Development Economics 63: 327-349.
'Spatial price transmission and asymmetry in the Ghanaian maize market ' () 63 Journal of Development Economics : 327 -349.
-
Acosta, A. 2012. Measuring spatial transmission of white maize prices between South Africa and Mozambique: an asymmetric error correction model approach. African Journal of Agricultural Economics 7: 1-13.
'Measuring spatial transmission of white maize prices between South Africa and Mozambique: an asymmetric error correction model approach ' () 7 African Journal of Agricultural Economics : 1 -13.
-
Acquah, H.G. and S.K. Dadzi. 2010. An application of the Von Cramon-Taubadel and Loy error correction models in analyzing asymmetric adjustment between retail and wholesale maize prices in Ghana. Journal of Development and Agricultural Economics 2: 100-106.
'An application of the Von Cramon-Taubadel and Loy error correction models in analyzing asymmetric adjustment between retail and wholesale maize prices in Ghana ' () 2 Journal of Development and Agricultural Economics : 100 -106.
-
Alemu, Z.G. and A. Ogundeji. 2010. Price transmission in the South African food market. Agrekon 49: 433-445.
'Price transmission in the South African food market ' () 49 Agrekon : 433 -445.
-
Azzam, A.A. and D. Hawdon. 1999. Estimating the demand for energy in Jordan: a Stock-Watson Dynamic OLS (DOLS) approach. Surrey Energy Economics Discussion Paper, University of Surrey, Surrey, UK.
'Estimating the demand for energy in Jordan: a Stock-Watson Dynamic OLS (DOLS) approach', ().
-
Bai, J. and P. Perron. 1998. Estimating and testing linear models with multiple structural changes. Econometrica 66: 47-78.
'Estimating and testing linear models with multiple structural changes ' () 66 Econometrica : 47 -78.
-
Clarke, J.A. and S. Mirza. 2006. A comparison of some common methods for detecting Granger non-causality. Journal of Statistical Computation and Simulation 76: 207-231.
'A comparison of some common methods for detecting Granger non-causality ' () 76 Journal of Statistical Computation and Simulation : 207 -231.
-
Cutts, M. and J. Kirsten. 2006. Asymmetric price transmission and market concentration: an investigation into four South African agro-food industries. South African Journal of Economics 74: 323-333.
'Asymmetric price transmission and market concentration: an investigation into four South African agro-food industries ' () 74 South African Journal of Economics : 323 -333.
-
Dickey, D.A. and W.A. Fuller. 1979. Distribution of the estimator for autoregressive time series with a unit root. Journal of the American Statistical Association 74: 427-431.
'Distribution of the estimator for autoregressive time series with a unit root ' () 74 Journal of the American Statistical Association : 427 -431.
-
Elliott, G., T.J. Rothenberg and J.H. Stock. 1996. Efficient tests for an autoregressive unit root. Econometrica 64: 813-836.
'Efficient tests for an autoregressive unit root ' () 64 Econometrica : 813 -836.
-
Engle, R.F. and C.W.J. Granger. 1987. Cointegration and error correction representation, estimation and testing. Econometrica 55(2): 251-276.
'Cointegration and error correction representation, estimation and testing ' () 55 Econometrica : 251 -276.
-
Ethiopian Grain Trade Enterprise (EGTE). 2016. Wheat import trends and subsidized wheat distribution. EGTE, Addis Ababa, Ethiopia.
-
Ethiopian Roads Authority (ERA). 2015. Assessment of 17 years performance of the road sector development program. ERA, Addis Ababa, Ethiopia.
-
Fiamohe, R., P.A. Seck and D.Y. Alia. 2013. Price transmission analysis using threshold models: an application to local rice markets in Benin and Mali. Food Security 5: 427-438.
'Price transmission analysis using threshold models: an application to local rice markets in Benin and Mali ' () 5 Food Security : 427 -438.
-
Food and Agriculture Organisation (FAO). 2015. FAOSTAT production database. Available at: http://www.fao.org/worldfoodsituation/foodpricesindex/en/
-
Getnet, K., W. Verbeke and J. Viaene. 2005. Modelling spatial price transmission in the grain markets of Ethiopia with an application of ARDL approach to white teff. Agricultural Economics 33: 491-502.
'Modelling spatial price transmission in the grain markets of Ethiopia with an application of ARDL approach to white teff ' () 33 Agricultural Economics : 491 -502.
-
Ihle, R., S. Von Cramon-Taubadel and S. Zorya. 2009. Markov-switching estimation of spatial maize price transmission processes between Tanzania and Kenya. American Journal of Agricultural Economics 91: 1432-1439.
'Markov-switching estimation of spatial maize price transmission processes between Tanzania and Kenya ' () 91 American Journal of Agricultural Economics : 1432 -1439.
-
Jaleta, M. and B. Gebermedhin. 2012. Price cointegration analyses of food crop markets: the case of wheat and teff commodities in Northern Ethiopia. African Journal of Agricultural Research 7: 3643-3652.
'Price cointegration analyses of food crop markets: the case of wheat and teff commodities in Northern Ethiopia ' () 7 African Journal of Agricultural Research : 3643 -3652.
-
Johansen, S. 1988. Statistical analysis of cointegration vectors. Journal of Economic Dynamics and Control 12(3): 231-254.
'Statistical analysis of cointegration vectors ' () 12 Journal of Economic Dynamics and Control : 231 -254.
-
Leybourne, S. and P. Newbold. 2003. Spurious rejections by cointegration tests induced by structural breaks. Applied Economics 35(9): 1117-1121.
'Spurious rejections by cointegration tests induced by structural breaks ' () 35 Applied Economics : 1117 -1121.
-
MacKinnon, J.G. 1991. Critical values for cointegration tests in long-run economic relationships. Oxford University Press, Oxford, UK, pp. 267-276.
'Critical values for cointegration tests in long-run economic relationships ', () 267 -276.
-
Meyer, J. and S. Von Cramon-Taubadel. 2004. Asymmetric price transmission: a survey. Journal of Agricultural Economics 55: 581-611.
'Asymmetric price transmission: a survey ' () 55 Journal of Agricultural Economics : 581 -611.
-
Minten, B., D. Stifel and S. Tamiru. 2012. Structural transformation in Ethiopia: evidence from cereal markets. Ethiopia Strategy Support Program II Working paper 39, Addis Ababa, Ethiopia.
'Structural transformation in Ethiopia: evidence from cereal markets', ().
-
Negassa, A. and J.R. Myers. 2007. Estimating policy effects on spatial market efficiency: an extension to the Parity Bound model. American Journal of Agricultural Economics 89: 338-352.
'Estimating policy effects on spatial market efficiency: an extension to the Parity Bound model ' () 89 American Journal of Agricultural Economics : 338 -352.
-
Ngare, L.W., S.K. Wambugu, J.M. Nzuma and C. Shisanya. 2013. Asymmetric price transmission in food markets in the highlands of central Kenya. Paper presented at the 4th International Conference of the African Association of Agricultural Economists. September 22-25, 2013. Hammamet, Tunisia.
'Asymmetric price transmission in food markets in the highlands of central Kenya', ().
-
Nogales, E.G. and J. Fonseca. 2014. Institutional procurement of staples from smallholders: the case of purchase for progress in Ethiopia. FAO, Rome, Italy.
'Institutional procurement of staples from smallholders: the case of purchase for progress in Ethiopia', ().
-
Perron, P. 1989. The great crash, the oil price shock, and the unit root hypothesis. Econometrica 57: 1361-1401.
'The great crash, the oil price shock, and the unit root hypothesis ' () 57 Econometrica : 1361 -1401.
-
Rafailidis, P. and C. Katrakilidis. 2014. The relationship between oil prices and stock prices: a non-linear asymmetric cointegration approach. Applied Financial Economics 24: 793-800.
'The relationship between oil prices and stock prices: a non-linear asymmetric cointegration approach ' () 24 Applied Financial Economics : 793 -800.
-
Rashid, S. and N. Minot. 2010. Are staple food markets in Africa efficient? Spatial price analyses and beyond. Paper presented at the Comesa policy seminar ‘Food price variability: causes, consequences, and policy option’. January 25-26, 2010, Maputo, Mozambique.
'Are staple food markets in Africa efficient?', ().
-
Rashid, S., N. Tefera, N. Minot and G. Ayele. 2013. Fertiliser in Ethiopia: an assessment of policies, value chain, and profitability. IFPRI discussion paper No. 01304, International Food Policy Research Institute, Washington, DC, USA.
Fertiliser in Ethiopia: an assessment of policies, value chain, and profitability , ().
-
Rapsomanikis, G., D. Hallam and P. Conforti. 2003. Market integration and price transmission in selected food and cash crop markets of developing countries: review and applications in commodity market review. FAO, Rome, Italy.
'Market integration and price transmission in selected food and cash crop markets of developing countries: review and applications in commodity market review', ().
-
Saikkonen, P. 1991. Asymptotically efficient estimation of cointegration regressions. Econometric Theory 7: 1-21.
'Asymptotically efficient estimation of cointegration regressions ' () 7 Econometric Theory : 1 -21.
-
Stock, J.H and M.W. Watson. 1993. A simple estimate of cointegrating vector in higher ordered integrated systems. Econometrica 61: 783-820.
'A simple estimate of cointegrating vector in higher ordered integrated systems ' () 61 Econometrica : 783 -820.
-
Tamru, S. 2013. Spatial integration of cereal markets in Ethiopia. Ethiopia Strategy Support Program II. ESSP working paper No. 56. International Food Policy Research Institute, Washington, DC, USA
'Spatial integration of cereal markets in Ethiopia. Ethiopia Strategy Support Program II ', in ESSP working paper No , ().
-
Toda, H.Y. and T. Yamamoto. 1995. Statistical inference in vector auto-regressions with partially integrated processes. Journal of Econometrics 66: 225-250.
'Statistical inference in vector auto-regressions with partially integrated processes ' () 66 Journal of Econometrics : 225 -250.
-
Ulimwengu, J.M., S. Workneh and Z. Paulos. 2009. Impact of soaring food price in Ethiopia: does location matter? International Food Policy Research Institute, Washington, DC, USA.
Impact of soaring food price in Ethiopia: does location matter? , ().
-
Usman, M.A. and M.G. Haile. 2017. Producer to retail price transmission in cereal markets in Ethiopia. Food Security 9: 815-829.
'Producer to retail price transmission in cereal markets in Ethiopia ' () 9 Food Security : 815 -829.
-
Von Cramon-Taubadel, S. and S. Fahlbusch. 1996. Estimating asymmetric price transmission with the error correction representation: an application to the German pork market. University of Kiel, Department of Agricultural Economics, Kiel, Germany.
'Estimating asymmetric price transmission with the error correction representation: an application to the German pork market', ().
-
Von Cramon-Taubadel, S. 1998. Estimating asymmetric price transmission with the error correction representation: an application to the German pork market. European Review of Agricultural Economics 25: 1-18.
'Estimating asymmetric price transmission with the error correction representation: an application to the German pork market ' () 25 European Review of Agricultural Economics : 1 -18.
-
Wondemu, K. 2015. Price transmission asymmetry in spatial grain markets in Ethiopia. African Development Review 27: 106-116.
'Price transmission asymmetry in spatial grain markets in Ethiopia ' () 27 African Development Review : 106 -116.
-
Worako, T.K., H.D. Van Schalkwyk, Z.G. Alemu and G. Ayele. 2008. Producer price and price transmission in a deregulated Ethiopian coffee market. Agrekon 47: 492-508.
'Producer price and price transmission in a deregulated Ethiopian coffee market ' () 47 Agrekon : 492 -508.
-
World Food Programme (WFP). 1989. Rehabilitation of forest, grazing, and agricultural lands. World Food Programme, Addis Ababa, Ethiopia.
-
Yami, M., F. Meyer and R. Hassan. 2017. Testing price leadership in major regional maize markets in Ethiopia: implications for targeted market intervention. Agrekon 56: 97-109.
'Testing price leadership in major regional maize markets in Ethiopia: implications for targeted market intervention ' () 56 Agrekon : 97 -109.
-
Zapata, H.O. and A.N. Rambaldi. 1997. Monte Carlo evidence on cointegration and causation. Oxford Bulletin of Economics and Statistics 59: 285-298.
'Monte Carlo evidence on cointegration and causation ' () 59 Oxford Bulletin of Economics and Statistics : 285 -298.
Supplementary Materials
| All Time | Past 365 days | Past 30 Days | |
|---|---|---|---|
| Abstract Views | 0 | 0 | 0 |
| Full Text Views | 131 | 71 | 6 |
| PDF Views & Downloads | 86 | 47 | 4 |
Should traders be blamed for soaring food prices in Ethiopia? Evidence from wholesale maize markets
In: International Food and Agribusiness Management ReviewSearch for other papers by Mesay Yami in
Current site
Google Scholar
PubMed
Search for other papers by Ferdi Meyer in
Current site
Google Scholar
PubMed
Search for other papers by Rashid Hassan in
Current site
Google Scholar
PubMed
The prevalence of imperfect price transmission in the agricultural food markets continues to be an important policy concern for most countries in Africa. Motivated by the coexistence of soaring food prices and high domestic food production, this article investigates the performance of wholesale white maize markets in Ethiopia during the post-agricultural market liberalization period. The presence of price manipulation in the grain market structure has important welfare implications as it impedes the full transmission of price reductions and increases among marketing intermediaries. Results indicate that regional maize markets adjusted more quickly to price decreases than price increases to the central Addis Ababa wholesale maize market prices, suggesting the absence of positive asymmetric price transmission. Our findings are in contrast with existing studies conducted in southern, western and eastern Africa major food commodity markets.
| All Time | Past 365 days | Past 30 Days | |
|---|---|---|---|
| Abstract Views | 0 | 0 | 0 |
| Full Text Views | 131 | 71 | 6 |
| PDF Views & Downloads | 86 | 47 | 4 |
