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Are Indian rice exporters able to price discriminate? Empirical evidence for basmati and non-basmati rice

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  • Akash Issar
  • Poornima Varma
Abstract
The role of exchange rate fluctuations on the pricing behaviour of Indian rice exporters in their major destination markets is examined using the pricing-to-market (PTM) model. The analysis was undertaken in a context where India has emerged as a leading exporter of rice in the world market. The study distinguishes between basmati and non-basmati rice in the analysis as the destination markets differ across these two varieties. One of the key contributions of this study is that it undertakes an analysis under 3 exchange rate models, they are: nominal, real and commodity-specific exchange rates. The results from our analysis indicated the presence of non-competitive pricing behaviour of India’s rice exporters in majority of destination markets due to both the market-specific characteristics as well as exchange rate-induced effects. The amplification of exchange rate effects was more prominent in commodity-specific exchange rate model whereas local currency stabilization was more prominent under nominal and real exchange rate models. Furthermore, the analysis showed that the commodity-specific exchange rate better predicts the PTM behaviour of rice exporters.

Suggested Citation

  • Akash Issar & Poornima Varma, 2016. "Are Indian rice exporters able to price discriminate? Empirical evidence for basmati and non-basmati rice," Applied Economics, Taylor & Francis Journals, vol. 48(60), pages 5897-5908, December.
    • Handle: RePEc:taf:applec:v:48:y:2016:i:60:p:5897-5908
    DOI: 10.1080/00036846.2016.1186798
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    References listed on IDEAS

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    1. Griffith, Garry R. & Mullen, John D., 2001. "Pricing-to-market in NSW rice export markets," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 45(3), pages 1-12.
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    8. Zsombor Pall & Oleksandr Perekhozhuk & Ramona Teuber & Thomas Glauben, 2013. "Are Russian Wheat Exporters Able to Price Discriminate? Empirical Evidence from the Last Decade," Journal of Agricultural Economics, Wiley Blackwell, vol. 64(1), pages 177-196, February.
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    Cited by:

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    3. Vladimir Milovanovic & Luboš Smutka, 2017. "Asian Countries in the Global Rice Market," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 65(2), pages 679-688.

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