Spatial integration of Russian domestic wheat markets

This study employs the econometric framework of price transmission to analyze spatial integration of major wheat growing markets in Russia. Russian government frequently intervenes to regulate trade relations by restricting export of wheat abroad in the periods of deficit of supply. Different non-linear models are used to capture the impact of intervention measures. The results show that in isolation from global markets, Russian export-oriented wheat producers increase their presence inside the country and domestic trade becomes more active. As a result, government interventions lead to reduction of wheat deficits.