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Abstract
The aim of this study is to evaluate the dynamics of pricing in the domestic
market of paddy rice in order to define the process of prices formation and the adjustment
intensity (periods in which the price transmission occurs) among the major producing
markets (Rio Grande do Sul and Mato Grosso states). The knowledge of price ratios
between markets is important for the development of trading contracts (fixed-term and
future contracts) for rice and for the formulation (or reformulation) of public policies for
the sector. As a methodological tool, we used the modeling of time series (Auto-Regression
Models with Vector Error Correction - VEC) and Granger’s causality. The Granger’s causality test indicated that prices in the Rio Grande do Sul state are important to
forecast prices in the Mato Grosso state. The model of transference estimated with an
error correction term showed that for each 1% of increase in the growth rate for the RS
prices, the growth rate of prices in MT will have, on average, a contemporaneous high of
0.44%, and around 0.17% in the following month.