chapter 2 - Bentham Science

More documents

Recommendations

Info

The Italian Demand for Imported Virgin Olive Oil Research Topics in Agricultural and Applied Economics, Vol. 2 5 oil, the corresponding figures for Turkey and Tunisia being 32% and 8%, respectively. Since mid 1990s, world olive oil exports significantly grew. Italian and Spanish exports - which represent 90% of the total for the EU as a whole – almost doubled. Greek exports, after falling in the mid-1990s, rose 30% (Fig. 1). Among non EU-countries, Tunisian exports decrease up to represent 21% of world exports while those from Turkey and, specially, from Syria increase to represent 10 and 5%, respectively of world exports. In terms of categories Greek exports essentially consist of extra virgin olive oil (73% in 2001/02), whereas the figures for Italy and Spain are 45% and 44%, respectively (EU Commission, 2004). In terms of market preparation, all of Greek exports and 91% of Italian exports are in small immediate containers. Exports in bulk represent an appreciable share of Spain's exports (35%), however. 700 600 500 400 300 200 100 0 Source: FAOSTAT Figure 1: Evolution of exports from main world suppliers (thousands t). 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 TUNISIA GREECE ITALY SPAIN Apart from the EU countries (mainly Italy), the United States, Australia, Japan and Canada account for practically all EU exports (Fig. 2) and tend to be in immediate containers of less than 18 kg. The other major exporters to nonproducing countries were Turkey (mainly to Canada, the United States, Australia and Japan), Tunisia (mainly to the United States) and Argentina (mainly to Brazil). Unlike its exports, the EU imports are fairly stable, with specific changes brought about by differences in production. Reduced levels of imports correspond to years in which world output was low or in which the EU production was very high. Conversely, high levels of imports correspond to years in which Community production was relatively small (EU Commission, 2004). Italy tends to account for the bulk of the Community's imports while German, Portuguese, United Kingdom (UK) and French imports have nearly always been negligible and those of Spain have been only noticeably in 1995 due to the severe drought in that country. A very interesting point in UE olive oil trade is the inward processing arrangements. Under inward processing arrangements import duty and other commercial policy measures are waived when products are imported from nonmember countries for re-exportation in the form of finished products after processing within the Community. Under "by equivalence" inward processing arrangements the importer must export an equivalent quantity of processed olive oil, but not necessarily the actual goods that were processed. They play a major role in the context of Community imports, accounting for 60-80% of the total volume of imports (Table 1).
Research Topics in Agricultural and Applied Economics, Vol. 2, 2011, 19-30 19 Food Crisis: Did Agricultural Prices Rise Faster than they Fell? Matthieu Stigler * and Piera Tortora Food and Agriculture Organisation of the United Nations; Rome, 00153 Italy Anthony N. Rezitis (Ed) All rights reserved - © 2011 <strong>Bentham</strong> <strong>Science</strong> Publishers Ltd. CHAPTER 2 Abstract: International agricultural markets have experienced important price fluctuations recently, with prices spiking in 2007-2008 and then declining sharply in 2008. While domestic prices generally followed these increases, there is concern that they remained at high levels despite decreases in international prices. This issue of asymmetry between downward and upward price transmission has been widely discussed in economic literature, and some authors have argued that such asymmetry is the rule rather than the exception. With its sustained price increase followed by a large decrease, the food price spike provides an ideal case to test this hypothesis. We assess this question empirically by investigating a sample of small wheat importing countries. We use time series models which allow for asymmetries - namely regime switching cointegration techniques - to examine whether the international price spike and its subsequent decline have been transmitted to domestic markets to the same extent. Out of the four countries we investigate, we find a clear case of a downward asymmetry, a clear case of upward asymmetry, the remaining two countries yield less definitive results. Keywords: Asymmetric price transmission, agricultural price spike, nonlinear cointegration, regime switching models. INTRODUCTION World prices of agricultural and other commodities have been rising since 2003, and the price of wheat, maize and rice surged dramatically in 2007-2008. The price spike meant increased food bills for many of the world’s poors and the break out of an international food crisis. This situation raised crucial questions for analysts, policy makers, and the international community. What caused the crisis? What are its international and domestic impacts 1? What can be done about it? It is in the light of these questions that several analysts investigated the underlying issue of whether and to what extent the price spike had been transmitted to domestic markets. Although answers to the latter question are highly country-specific, many studies concluded that indeed domestic markets followed the international price increase. The rapid price increase reversed in 2008-2009 but -by contrast to the price spike- this decline seems to have received limited attention. To our knowledge, there have been no studies appraising how the price decline was transmitted to domestic prices. However, a preliminary analysis by the FAO Global Information and Early Warning System (GIEWS) points out that in July 2009, more than half of the 860 domestic price series monitored were at the same or higher levels than before the crisis, while the international prices had returned to pre-crisis levels (FAO 2009). This suggests that the price decline in the international market was not fully transmitted to domestic markets, and that domestic prices may have responded differently to the world price spike than they did to the decrease that followed. The idea that prices may be transmitted asymmetrically is not new, and various studies have observed this phenomenon in diverse contexts. With its skyrocketing peaks and large decreases, recent world price fluctuations provide ideal ground to investigate this hypothesis. We thus apply time series models that allow for asymmetries - namely regime switching cointegration techniques - to examine the price transmission of the recent world price movements. Due to the complexity of the models and to limited public data availability, we restrict our attention to *Address correspondence to Matthieu Stigler: Food and Agriculture Organisation of the United Nations, Rome, 00153, Italy; Tel: +39 06 570 533 64; E-mail: matthieu.stigler@gmail.com 1 For country-specific studies see: Arndt et alii (2008) for Mozambique; Benson et alii (2008) for Uganda; Cudjoe et alii (2010) for Ghana; Ul Haq et alii (2008) for Pakistan; and Ivanic and Martin (2008)] for nine low income countries. For a comprehensive review of the causes and consequences of the food crisis see Headey and Fan (2010).
Page 2 and 3: Research Topics in Agricultural and
Page 4 and 5: CONTENTS Foreword i Preface ii Cont
Page 6 and 7: ii PREFACE The aim of the e-book se
Page 8 and 9: iv Alexander Pailas Agricultural Ba
Page 14 and 15: 20 Research Topics in Agricultural
Page 18 and 19: New Trends in Consumer Needs Resear
Page 20 and 21: Consumer Knowledge of Animal Welfar
Page 30 and 31: Means-end Chain Analysis of Food Pr
Page 36 and 37: Global Crisis and Agricultural Publ
Page 42 and 43: Measuring Labour Productivity and M
Page 44: Index Research Topics in Agricultur

chapter 2 - Bentham Science

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?