Evaluation of Market Relations in Soft Milling Wheat Agri-food Chain

Lenka Rumánková

DOI 10.7160/aol.2016.080412
No 4/2016, December
pp. 133-141

Rumánková, L. (2016) “Evaluation of Market Relations in Soft Milling Wheat Agri-food Chain", AGRIS on-line Papers in Economics and Informatics, Vol. 8, No. 4, pp. 133 - 141. ISSN 1804-1930. DOI 10.7160/aol.2016.080412.

Abstract

This paper deals with the assessment of price transmission in partial chains of soft milling wheat on example of the Czech Republic. The price transmission examination is accompanied by an international comparison of analyzed topic. The analysis is carried out for the chain of smooth flour, white baked goods and consumer bread. In all cases, the relation of the farm-gate price – wholesale price – consumer price is examined. The aim of the article is to address the question of whether all of the partial product chains of soft milling wheat can be considered identical in terms of the formation of the price and its transmission to other levels. The analysis itself is based upon variables in the form of time series containing monthly data for the period of January 1999 – October 2011, the time series contain 154 observations. Subsequently, the possibility of the results generalization was verified based on the results of the price transmission in period of January 2012 – December 2015. Price transmission is modeled with the utilization of the Vector Error Correction Model and co-integration analysis. The research showed certain congruent features of the analyzed chains, which can be further generalized. However, significant differences were also established, which constitute the uniqueness of each chain. One-way relations were established on some market levels, while mutual relations were established on others. Overall, the relations in the analyzed agri-food chains can be considered long-term, inelastic and demand-driven. Price transmissions in the chains do occur, individual changes in partial prices are followed by the relevant reaction.

Keywords

Agri-food chain, farm-gate price, wholesale price, consumer price, soft milling wheat, price transmission, co-integration analysis, VECM.

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