The Effects of Vietnamese Export Policies on the World Market Integration of Domestic Rice Markets

World market prices of rice have been subject to large fluctuations in recent years. Vietnam is a major exporter of rice which is also the main staple food in the country. The Vietnamese government is limiting exports, to insulate domestic consumers from world market price hikes. The effects of these policy interventions on price transmission are investigated in this study. We analyze the marketing chain of rice in Vietnam and construct a multivariate Vector Error Correction Model for markets across the country and include a policy parameter and an international reference price. We find reasonable cointegration of most markets analyzed and only a limited effect of the applied export policies: they suppressed the price in the main producing region, but did not significantly affect the prices in main deficit region. Thus food security programs directly targeting poor consumers are likely to be more efficient to improve food security.

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JEL Codes:
Q11; Q13; Q17

 Record created 2017-04-01, last modified 2020-10-28

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