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Interregional Integration Of Wheat Markets In Kazakhstan

Author

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  • Brosig, Stephan
  • Yakhshilikov, Yorbol
Abstract
Reliable marketing opportunities in both interregional and international trade along with relatively low transportation [and transaction] costs are essential to profitability of wheat production. In this study we have investigated one aspect of the quality of marketing and trade opportunities in the Kazakh wheat sector, that is the extent and nature of integration among regional wheat markets. We applied threshold cointegration technique to assess the co-movement between time series of elevator prices at three grain-trading (and producing) spots in the northern and central parts of the country. Results suggest that markets of two northern grain trading spots (Petropavlovsk and Kokshetau) are closely connected with each other while their connection with Karaganda in central Kazakhstan is much weaker. Here, levelling out of price gaps through arbitrage trade only occurs after a threshold of considerable extent has been surpassed. ZUSAMMENFASSUNG Eine wichtige Voraussetzung für die Wirtschaftlichkeit der Getreideproduktion sind verlässliche Vermarktungswege, die interregionalen und internationalen Handel zu relativ geringen Transport- und Transaktionskosten zulassen. Die Studie behandelt die Integration regionaler Weizenmärkte miteinander und beleuchtet damit, wie reibungslos Getreidehandel zwischen diesen Regionen möglich ist. Mit Hilfe von Verfahren der threshold cointegration analysis werden Zusammenhänge in den Preisentwicklungen zwischen drei wichtigen Handelsplätzen in Nordund Zentralkasachstan untersucht. Die Märkte der beiden nördlichen Marktorte Petropavlovsk und Kokshetau stehen in enger Verbindung zueinander, während sie wesentlich unabhängiger von den Marktentwickungen im zentralkasachischen Karaganda sind. Ein Ausgleich von Preisunterschieden zwischen den nördlichen Märkten und Karaganda findet erst statt, wenn diese Unterschiede einen beträchtlichen Schwellenwert (threshold) übersteigen.

Suggested Citation

  • Brosig, Stephan & Yakhshilikov, Yorbol, 2005. "Interregional Integration Of Wheat Markets In Kazakhstan," IAMO Discussion Papers 14921, Institute of Agricultural Development in Transition Economies (IAMO).
    • Handle: RePEc:ags:iamodp:14921
    DOI: 10.22004/ag.econ.14921
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    Cited by:

    1. Ilyasov, Jarilkasin & Goetz, Linde & Akramov, Kamiljon & Dorosh, Paul & Glauben, Thomas, 2015. "Market Integration and PRice Transmission in Tajikistan's Wheat Markets" Rising like rockets but falling like feathers?," 2015 Conference, August 9-14, 2015, Milan, Italy 211786, International Association of Agricultural Economists.
    2. Gunnar Breustedt & Raushan Bokusheva & Olaf Heidelbach, 2008. "Evaluating the Potential of Index Insurance Schemes to Reduce Crop Yield Risk in an Arid Region," Journal of Agricultural Economics, Wiley Blackwell, vol. 59(2), pages 312-328, June.
    3. Heidelbach, Olaf, 2007. "Efficiency of selected risk management instruments: An empirical analysis of risk reduction in Kazakhstani crop production," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 40, number 92323.
    4. Libman, Alexander, 2009. "Models of market integration in Central Asia – comparative performance," MPRA Paper 17510, University Library of Munich, Germany.
    5. Jarilkasin Ilyasov & Linde Götz & Kamiljon Akramov & Paul Dorosh & Thomas Glauben, 2016. "Market Integration and Price Transmission in Tajikistan’s Wheat Markets: Rising Like Rockets but Falling Like Feathers?," Working Papers id:11177, eSocialSciences.

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    More about this item

    Keywords

    Crop Production/Industries; Marketing;

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

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