HOW DID POLICY INTERVENTIONS IN WHEAT EXPORT MARKETS IN RUSSIA AND UKRAINE DURING THE FOOD CRISIS 2007/2008 INFLUENCE WORLD MARKET PRICE TRANSMISSION?

This paper investigates the impacts of export controls in Russia and Ukraine on wheat world market price transmission during the 2007/2008 global food crisis. Russia and Ukraine aimed to reduce wheat exports induced by extraordinarily high world market prices to secure sufficient wheat supply on the domestic markets. Utilizing a Markov-Switching vector error correction model (MSVECM), we find that the temporary export restrictions induced negative effects on wheat markets in Russia and Ukraine. Although instability increased on the world markets itself, we have shown that the increase in the market instability was particularly pronounced in Russia and Ukraine. Also, the export restrictions dampened price transmission to the farmers’ prices, which pushed the growers’ prices below their long-run equilibrium level. Thus, investment incentives in wheat production which could result from high world market prices were foregone.


Issue Date:
2010-09
Publication Type:
Conference Paper/ Presentation
Record Identifier:
http://ageconsearch.umn.edu/record/93952
PURL Identifier:
http://purl.umn.edu/93952
Total Pages:
13
Note:
C1_2




 Record created 2017-04-01, last modified 2018-01-22

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