Price Transmission Research Articles

Inflation Forecasting Using Automatic ARIMA Model in Sri Lanka

Elevated inflation again has been a key macroeconomic problem that impacts negatively on economic activities in recent times. Inflation is widely used as a short run monetary policy tool that has impact on redistribution of resources through price transmission mechanism in economies. Forecasting is also a challenging task with high volatilities of the price index that use to measure inflation. However, inflation forecasts are essential in setting monetary policy targets and the decision-making process in the short run. In Sri Lanka inflation recorded at its highest level ever in the year 2022 reversing its single digit inflation maintained in a decade. The aim of this paper is to estimate an inflation forecasting model using Automatic ARIMA technique in Sri Lanka employing data from 2014M01 to 2023M01 towards forecasting end point to end 2024, using secondary sourced monthly data. Accordingly, Colombo Consumer Price Index shows a further upward trend forecasting range given in CCPIC index point from 224 to 260 during the period for inflation measured using year on year base is in declining trend, below 10 per cent, but not par equal to the mid-single level as per the data, CCPI 2013=100. Given the demand full inflation factors, policies to encourage supply and production are recommended in the medium term.

Research on price transmission in Chinese mining stock market: Based on industry

The strong impact of COVID-19 on the global mining market has caused severe fluctuations in the prices of mineral products and mining stocks. Meanwhile, geopolitical conflicts have exacerbated risks in minerals trade and mining stock transactions. In the face of uncertainties in the international economic landscape and volatility of stock prices, China, as the world's major mineral trading country, has become increasingly linked between its stock market and the mining economy. To clarify the characteristics of mining stock price fluctuations and the evolution of the transmission relationships, and identify the key nodes and main paths of price transmission, we select 100 Chinese mining stocks from January 2019 to October 2022, distinguish them according to the industry category, and use Granger causality test, minimum spanning tree model and complex network analysis method to study. The results show that: (1) Chinese mining stock prices have risen significantly since 2020, and there has been a “decoupling” phenomenon within the stock market, that is, the linkage between some mining stocks has weakened. (2) The stock price fluctuation characteristics and transmission effects of different mining industries are obviously different. Precious metal minerals (PM) have the most dramatic changes in price fluctuations, the most prominent hedging characteristics, and the rapid price response ability, which is the first to accept price transmission. rare earth and rare metal minerals (RE) are sensitive to price fluctuations and are usually the “leader” of the transmission path. Bulk non-ferrous minerals (BNFM) have the most stable price fluctuations and are closely related to other stocks, which is a “transit warehouse” in the transmission path. (3) The price transmission mechanism of Chinese mining stock market has gradually stabilized, and the main transmission paths of “Coal→Agricultural minerals (Agri)→BNFM→Steel” and “PM, Core minerals for new energy (NEM), and RE→BNFM” have been formed in 2022.

Natural Gas–Electricity Price Linkage Analysis Method Based on Benefit–Cost and Attention–VECM Model

In recent years, frequent linkage events of natural gas and electricity prices have seriously affected the stability of the energy supply market. In view of the increasingly close linkage relationship between gas and electricity prices, a gas–electricity price linkage analysis method considering the benefit–cost and price transmission of gas units is proposed. Firstly, a benefit–cost model of gas units based on risk premium theory is constructed to reflect the willingness of gas units to offer prices in different market environments. Secondly, a vector error correction model (VECM)-based gas–electricity price conduction analysis method was proposed to study the long-term co-integration relationship between gas–electricity prices and the short-term fluctuation conduction process. Then, aiming at the problem of delay in price transmission, a time-delay analysis method of gas–electricity price based on the attention mechanism is proposed. Finally, the gas price index and average gas power price data of China from August 2020 to November 2022 are used to verify the validity of the proposed model; the numerical results show that the proposed method can determine the long-term stable fitting relationship between gas and electricity prices, and can also analyze and judge the conduction direction of gas and electricity price fluctuations in different time periods.

Is agricultural self-sufficiency effective to protect local markets from global markets? Empirical evidence from the beef sector in Japan

ABSTRACT Although for decades, the Ministry of Agriculture, Forestry, and Fishery of Japan has formed agricultural policies based on food self-sufficiency as a vital factor in securing the domestic food supply, the impacts of agricultural self-sufficiency on the relationship between international and domestic markets are not well understood. Most previous literature on agricultural price transmissions applies conventional error correction and vector autoregression models. However, we employ the state-of-the-art technique, namely the time-varying parameter vector autoregression (TVP-VAR) connectedness model, as well as the dynamic conditional correlations based on the asymmetric Baba – Engle–Kraft – Kroner method to investigate the effectiveness of beef self-sufficiency and its inventory in stabilizing local beef prices in Japan. Our primary results indicate that the global beef price is the net transmitter of shocks, while the home-grown beef price in Japan is the net receiver of shocks. Furthermore, we find that high self-sufficiency in beef does not significantly protect local beef markets from global beef markets, but the imported beef inventory effectively alleviates the wholesale price volatility of imported beef. One policy implication is that the government should not take protectionist policies to enhance beef self-sufficiency, and import beef stocks could be accumulated to stabilize imported beef markets.

Market integration of chickpea crop: an evidence of India

PurposeThe purpose of this paper is to examine the market integration and direction of causality of wholesale and retail prices for the chickpea legume in major chickpea markets in India.Design/methodology/approachIn this paper, the authors employ the Johansen co-integration test, Granger causality test, vector autoregression (VAR), and vector error correction model (VECM) to examine the integration of markets. The authors use monthly wholesale and retail price data of the chickpea crop from select markets in India spanning January 2003–December 2020.FindingsThe results of this study strongly confirm the co-integration and interdependency of the selected chickpea markets in India. However, the speed of adjustment of prices in the wholesale market is weakest in Bikaner, followed by Daryapur and Narsinghpur; it is relatively moderate in Gulbarga. In contrast, the speed of adjustment is negative for Bhopal and Delhi, weak for Nasik, and moderate for retail market prices in Bangalore. The results of the causality test show that the Narsinghpur, Daryapur, and Gulbarga markets are the most influential, with bidirectional relations in the case of wholesale market prices. Meanwhile, the Bangalore market is the most connected and effective retail market among the selected retail markets. It has bidirectional price transmission with two other markets, i.e. Bhopal and Nasik.Research limitations/implicationsThis paper calls for forthcoming studies to investigate the impact of external and internal factors, such as market infrastructure; government policy regarding self-reliant production; product physical characteristics; and rate of utilization indicating market integration. They should also focus on strengthening information technology for the regular flow of market information to help farmers increase their incomes.Originality/valueVery few studies have explored market efficiency and direction of causality using both linear and nonlinear techniques for wholesale and retail prices of chickpea in India.

Resilient forest-based value chains? Econometric analysis of roundwood prices in five European countries in the era of natural disturbances

Climate change poses a growing threat to European forests due to the increasing frequency and severity of storms, insect outbreaks, and other natural disturbances. Natural disturbances affect both the volume and the quality of harvested wood and increase the tendency of increased salvage loggings, reducing roundwood prices over the short-term. The increase of unexpected inflow of wood resources prompted by disturbance-induced salvage logging can undermine the stability of forest-based value chains. In addition to supply shocks, rebuilding can increase the demand for wood products in regions affected by storms. This study assesses the impact of supply and demand shocks on roundwood prices. An econometric analysis was performed focusing on five forest-rich European countries (Austria, Czechia, Germany, Finland, and Sweden), applying the theory of price transmission and using a set of candidate resilience predictors that were expected to moderate shock impacts. We used annual time series data in differenced form on salvage logging, forest products production and trade, and roundwood prices. We found that disturbances tend to increase the domestic prices of sawlogs, suggesting a shortage effect on high-quality wood. The effect is less pronounced when country-level sawlog exports are high, implying that mainly high-quality sawlogs are exported in the cases in question. For pulpwood, supply shocks tend to decrease pulpwood prices. Strategic logging management and international trade are possible resilience predictors, but their potential is limited and should not be overestimated. Since it is difficult to assess the magnitude by which the changing climate will affect the already increasing disturbance regimes, the results only allow indirect projections to be made about future and larger magnitude events.

Asymmetric price transmission along the supply chain of perishable agricultural commodities: A nonlinear ARDL approach

This study aims to evaluate the asymmetric price transmission in terms of magnitude and speed between the wholesale and retail levels of the Sri Lankan fruit and vegetable markets. Using monthly data of wholesale and retail prices of 12 vegetable and three fruit varieties in Sri Lanka for the period 2005–2019, the study estimates a Nonlinear Autoregressive Distributed Lag (NARDL) model. Almost all food commodities used in this study (fruit and vegetables) show significant positive vertical asymmetry in price adjustments in the long run. The results indicate that the transmission rate of price increases in the wholesale market is greater than in the retail level when compared to price reductions in the wholesale market. This study suggests relevant policy options to explore and address this issue.

Analysis of rural–urban vegetable market dynamics in Central Gondar Zone, Ethiopia

BackgroundVegetable crops are among most perishable agricultural products which require efficient marketing system to reach them fresh to consumers. Weak market integration and sluggish price transmission of such perishable products can lead to suboptimal allocation of resources. This study was aimed to identify the degree of vegetable price integration and speed of price transmission between urban and rural vegetable markets.MethodsTwo rural markets (Maksegnit and Koladiba) and one central urban market (Gondar) were selected for the purpose of the analysis based on their strong relationship as supply and destination market for vegetable crops. Price data of vegetable crops were collected from September 2013 to December 2018 from each market areas trade and revenue department offices. Augmented Dickey-Fuller test, Granger causality test and error correction model were utilized in the process of the analysis.ResultsThe result shows that both rural markets were integrated with urban market for garlic crop. In addition, the rural markets caused the urban market to change not in the reverse direction. Moreover, urban market is adjusted by about 30% per month when there were a 1% price shock in rural markets for garlic crop. This speed of price transmission is sluggish for perishable crops and seasonally flexible prices.ConclusionThis study concluded that vegetable prices are determined from demand side and it should be the target for any planned policy modification.

Spatial price transmission in the onion markets of Bangladesh: An application of NARDL approach.

As the price of local onions is greatly impacted by the price of imported onions at these two levels of the supply chain, the goal of this study was to ascertain whether onion prices in Bangladesh are transmitted asymmetrically at the wholesale and retail levels. To analyze asymmetry, the study employed the nonlinear autoregressive distributed lag (NARDL) model in the short and long run using monthly time series data from January 2006 to December 2020. The NARDL model captures the effects of both positive and negative shocks in the short as well as in the long run. The empirical results from the NARDL indicate that the wholesale price of local onion shares a short-run relationship with the wholesale price of imported onion while the local retail price of onion shares a long-run relationship with the imported retail price of onion. In addition, the short-run impact of local wholesale and imported wholesale prices is asymmetric. Long-run evidence supports the existence of an asymmetric effect between the local and imported retail onion prices. Using the Pairwise Granger causality test, we examined the causal relationships between wholesale and retail prices. The direction of the casual relationship indicates that the wholesale and retail prices of imported onions lead to the wholesale and retail prices of local onions. A clear understanding of the onion market, how prices move between market actors, and its role in determining market price interaction could be gained by analyzing the asymmetric relationship between the local and imported onion prices. As a result, significant policy recommendations could be made to control the onion price in Bangladesh.

Role of macroeconomic indicators in Uganda’s food price inflation: a VECM approach

This study was conducted to empirically examine the potential impact of macroeconomic indicators such as exchange rate, GDP, money supply, and food exports on Uganda’s food price inflation. The study employed the Johansen cointegration analysis and VEC model using quarterly data from 2000Q1 to 2022Q1. Outcomes of the analysis show that all variables are positive and statistically significant in influencing food prices in the long run except GDP which was negative and significant. However, in the short run, only GDP and the lag of food CPI were significant and influenced food prices positively. Based on the variance decomposition analysis and the very low R-squared value (0.2493), it can be concluded that food prices in Uganda are greatly influenced by factors other than macroeconomic indicators. These factors include changes in the weather pattern which lead to low food supplies, price transmission effects of rising food and fuel prices in the international markets, increased domestic food demand, and higher costs of imported production inputs. Therefore, while it is necessary to recognize the role of macroeconomic indicators in food price inflation, it is equally important to emphasize the role played by these other factors in determining food prices in Uganda for effective policy implementations.

PRICE TRANSMISSION ANALYSIS OF RED CHILI PEPPERS (Capsicum annuum L.) IN ACEH PROVINCE

For horticultural commodities in general, the role of marketing for red chili commodities makes an important contribution in improving the performance of red chili commodity farming as a whole considering the unique characteristics of horticultural commodities in general such as perishability, perishability, volumenious, production is seasonal while consumption occurs throughout the year. Red chili marketing from farmers to the consumer level, the interaction between marketing agencies becomes important in forming prices. Producing farmers still seem to face price fluctuations, especially during harvest, and it is traders who have more access to obtain higher prices. The purpose of this research is to analyze the price transmission pattern of red chili at the producer level, wholesalers and consumers as well as analyzing what factors influence the formation and movement of red chili prices at the level of red chili producers, wholesalers and consumers in Aceh Province. The results of the study, during 2017-2021 the transmission of red chili prices took place indirectly, meaning that there was a short-term asymmetry at the level of producers to wholesalers and wholesalers to producers. One of the factors causing price formation to occur in the period 2017-2021 is the available supply, while the price of fuel oil is not significant because the price of changes in fuel oil does not fluctuate except at the end of 2021 until now. During 2017-2021 the transmission of red chili prices took place indirectly, meaning that there was a short-term asymmetry at the producer to wholesale and wholesale to producer levels. One of the factors causing price formation to occur in the period 2017-2021 is the available supply, while the price of fuel oil is not significant because the price of changes in fuel oil does not fluctuate except at the end of 2021 until now. During 2017-2021 the transmission of red chili prices took place indirectly, meaning that there was a short-term asymmetry at the producer to wholesale and wholesale to producer levels. One of the factors causing price formation to occur in the period 2017-2021 is the available supply, while the price of fuel oil is not significant because the price of changes in fuel oil does not fluctuate except at the end of 2021 until now.

Analysis of Asymmetric Price Transmission of Regional Potato Markets in Ecuador

This study analyzed spatial price transmission of potato markets in Ecuador. Price transmission is an essential indicator to understand a market system. To evaluate asymmetric price transmission between two spatial markets, the Nonlinear Autoregressive Distributed Lag (NARDL) model was applied in the study. The four major provinces such as Quito, Latacunga, Riobamba and San Gabriel of potato production are selected and spatial market data are collected from the System of Agriculture Pubic Information in Ecuador. The study found that there exist asymmetric price transmissions between Riobamba and Latacunga, and Riobamba and San Gabriel for long and short run. Quito and Latacunga, and Riobamba and Quito showed asymmetric price transmission for long run, but not for short run. The positive and negative effects of the long-run relationship between Riobamba and Quito and between Riobamba and San Gabriel are bigger than between other spatial markets. It is the first study to provide empirical information about regional potato markets.

Spatial market integration of cowpea (Vigna unguiculata) in Adamawa state, Nigeria

The study was conducted to investigate agricultural price transmission across space and time of cowpea in Taraba State, Nigeria. Secondary data was the main sources of data which was collected from the prominent market in the State on weekly basis for the period of 16 months (between November 2021 to February 2022). Purposive sampling technique was adopted for the selection of cowpea markets on the basis of production output and market activities. Inferential statistics were used as analytical tools which involved the use of Augmented Dickey Fuller (ADF) test, Johansen Co-integration Model, Granger Causality tests and Vector Error Correction Model (VECM). The results of the study indicates that price of cowpea in the study area were stationary at first order of difference at 5% significant level. The result of Johansen cointegration analysis was based on trace statistics, which revealed high existence of co-integration among the market pairs in the study areas. The analysis of the study reveals that there exist bidirectional and unidirectional causality between cowpea markets. The study confirms the existence long run relationship running from Sabon Kasuwan Mubi to other market and also the existence of short run relationship among the market pairs in the study area. The study concludes that there is a strong co-integration between cowpea markets in Taraba State due to efficient free flow of price signals and market information between market pairs. Cowpea markets in the research area have a long-run and short run dynamic. It is therefore, recommended that government should make market infrastructure a priority in the State by providing storage facilities and a robust transportation system.

Does vertical asymmetric price transmission exist in the rice markets?

Purpose. This study aims to empirically measure and analyze the long-run relationship and asymmetric price transmission of the rice market in Aceh Province, Indonesia. It also attempts to empirically examine and analyze the existence of the vertical price trends along the rice distribution channels both in the short term and long term.
 Methodology / approach. Monthly data from January 2009 to December 2019 on the prices of dry harvested rice (known as Milled Dry Grain – MDG in Indonesia) at the farm level, the prices of MDG at the rice mill level, and the retail prices of the medium- and premium-quality rice were gathered from the report of Statistics Indonesian Agency (BPS – Statistics Indonesia). The study uses a series of econometric techniques comprising cointegration, causality, and Error Correction Model (ECM) to investigate the research objectives. 
 Results. The study found price integration between the upstream and downstream rice markets. The asymmetric price transmission existed in the short run along the rice distribution chain, including the prices of medium-quality rice and premium-quality rice. In the long term, the price of MDG at the huller level is transmitted asymmetrically to the premium-quality rice at the consumer level. A positive asymmetric price transmission is found along the rice supply chain, indicating an increase in price in the upstream market has transmitted faster to the downstream markets than the price decreases.
 Originality / scientific novelty. Unlike previous studies that analyzed only price integration in the rice market and the direction of price transmission separately, this study empirically investigates both price integration, price transmission, and the direction and magnitude of asymmetric price transmission in the Indonesian rice market. Specifically, this study explores the existence of price integration from upstream to downstream markets and the existence of asymmetric price transmission as well as measures the magnitude and direction of asymmetric price transmission in the rice market in Indonesia. The findings of the study enrich the existing literature and contribute insights into enhancing rice price policy from the perspective of Indonesia, the fourth largest populous country in the world. 
 Practical value / implications. These findings show the importance for the local government to maintain symmetrical market conditions to ensure efficient rice markets in the long term. Rice traders that control the premium-quality rice market by reprocessing medium-quality rice into premium-quality rice should be closely monitored. An inefficient rice market has caused consumers to spend a large proportion of their income on rice, leaving only a little to afford other needs.

Price Transmission: The Case of the UK Dairy Market

The UK milk market has faced major economic difficulties over the last 20 years, seeing the smallest milk producers exit the industry. The key objective of this study is to examine price transmission within the UK milk market to understand the market’s efficiency and influences. An Augmented Dickey–Fuller unit root test identified all the examined series were stationary at the first difference. A modified Dickey–Fuller test allows for levels and trends that differ across a single break date and Bai–Perron test identified multiple structural breaks, including January 2012, July 2015, and November 2017. The Johansen cointegration test identified one cointegrating factor. The Error Correction Model results identified that prices would regain equilibrium at 14%, roughly 7 months after a price shock. Granger Causality identified the producer to granger cause retailer prices. The Threshold Autoregressive model suggests the dataset is symmetric. Econometric research into the UK’s liquid milk market is limited. As such, this study will provide an understanding as to whether current econometric policies are working, alongside the potential to aid the improvement or development of new policies while the UK exits the EU. Additionally, this study includes structural breaks as previous studies have failed to do so, which has led to a mixture of results.

Estimating Vertical Price Transmission in Pulse Markets of India

This study was conducted to analyze the vertical integration in selected chickpea and pigeon pea markets. The Johansen cointegration method was used to observe the relationship between wholesale prices and retail prices of pulses. Further, the Vector Error Correction Model (VECM) was used to show short-run dynamics. Wald test statistic was used to examine the influence of all the lagged variables on retail prices. It was observed from the results of vertical integration that wholesale and retail prices were cointegrated only for markets like Delhi, Mumbai and Bangalore, which were either central or terminal. No co-integration was found for producing markets like Indore and Jaipur. The wholesale and retail prices behaved independently in the short run. Lack of integration implied an imperfect market situation for pulses hindering the perfect flow of price transmission. So, government policies should be formulated in such a way that ensures greater market efficiency. Physical and institutional market infrastructure needs to improve price transmission, specifically in the producer market.

Spatial Market Integration, Price Transmission and Transaction Costs in Major Onion Markets of India

The price information is one of the prime objectives of marketing strategies, and the farmers are unable to determine the marketing strategies without knowing the price movements of the agricultural commodities. In this context, the study has examined the spatial price integration among four major onion markets using the threshold vector error correction model (TVECM) that takes into account transaction costs in the price adjustment process. Augmented Dickey–Fuller and Phillips–Perron tests for unit root suggest that the time series is I(1). The application of the Johansen cointegration technique supports the presence of long-run price association and equilibrium in all pairs of onion markets. The Granger Causality test unveils that Bengaluru Granger causes all the markets except Kolkata. The Hansen and Seo supreme Lagrange Multiplier ( SupLM) test of linearity suggests that non-linear TVECM with one threshold and two regimes is best fit for the underlying data for three pairs of markets. While the rest of the three pairs, the SupLM test rejects the null of linearity, therefore, linear vector error correction model (VECM) is estimated. Finally, VECM and TVECM results reveal that Mumbai and Bengaluru are dominant markets in price formation in rest of the markets. Against these findings, it is suggested that the prices should be stabilised in the dominant markets so that the price shocks are not transferred to other markets. The threshold parameter, which is analogous to transaction cost, reveals the high transaction costs between the selected markets pairs, especially Mumbai and Delhi. One of the reasons for the high transaction costs may be the inefficiencies in infrastructure and communication. While a more correct explanation for this difference can be attributed to the differences in marketing fees, taxes, commission charges, license fees, etc., across the spatially separated agricultural markets. JEL Codes: Q1, Q13, D4, C22, D23

Trading gap in holidays and price transmission: Evidence from cross-listed stocks on the A-share and H-share markets

Chinese public holidays of differing durations celebrated in mainland China and Hong Kong provide a unique trading gap when the A-share markets are closed but the H-share market is not. In this study, we examine how these non-overlapping trading gaps caused by holidays affect price transmission between cross-listed stocks in the A-share and H-share markets. We find that the price movements of H-shares during trading gaps are positively associated with post-holiday drifts in the A-share markets. This positive association is stronger when the length of non-overlapping holidays is longer, and when firms have a weaker connection to Hong Kong market. Moreover, our evidence reveals that investor distraction rather than sentiment during holiday periods may be the reason for this positive association. Finally, our results show that a portfolio trading strategy based on our findings can be profitable, indicating the economic magnitude of our findings.

ANALYSIS OF PRICE TRANSMISSION ELASTICITY OF POTATO IN KARO DISTRICT, NORTH SUMATERA PROVINCE

The price gap between the price obtained by farmers and the price obtained by retail traders indicates that the price received by retail traders is not the price received by farmers. Prices are high when production is low, on the other hand during harvest the prices obtained are usually low, even though the product may not sell well because there are many products on the market. As a result of large price fluctuations, potato is a seasonal crop and its varied production often creates uncertainty for farmers in terms of income or profits for farmers. The purpose of this research is to analyze the price transmission elasticity of potatoes in Karo Regency and to analyze the marketing margin and farmer share. This research uses secondary data for 5 years (72 months) from 2018 to 2022. The research method used to analyze price transmission elasticity is simple linear regression. The results showed that the price transmission elasticity of potatoes in Karo Regency was inelastic. The marketing margin received by potato wholesalers in Karo Regency is RP 5,348/Kg, with a percentage of 24.67%. the marketing margin received by retail potato traders in Karo Regency is RP 11,152/Kg, with a percentage of 32.11%.

Price transmission in shrimp production in Vietnam

Under the trade international integration, vertical price transmission in agri-food export supply chains is an essential issue that needs attention. This study analyses the price transmission from export prices to farm-gate prices of the black-tiger shrimp and white-leg shrimp production in Vietnam. Monthly price series of black-tiger shrimp and white-leg shrimp were collected from January 2015 to October 2020, from the Department of Aquaculture of Ca Mau, Soc Trang, Kien Giang, Ben Tre provinces; Vietnam Association of Seafood Exporters and Producers, and Vietnam market analysis and forecast joint stock company. The Johansen cointegration test, the Toda-Yamamoto Granger causality test, the Engle-Granger’s two-stage estimation, and the asymmetric error correction model using the Houck and Ward approach were applied. The results showed a long-term relationship between the farm-gate prices and export prices for both black-tiger shrimp and white-leg shrimp. The export prices were the price leader. In the long run, the price transmission from export prices to farm-gate prices in both black-tiger shrimp and white-leg shrimp was incomplete; however, the white-leg shrimp’s price transmission was noticeably better than black-tiger shrimp’s. In the short run, there was no statistically significant effect of export prices on farm-gate prices of black-tiger shrimp; while the price transmission of white-leg shrimp was significant but relatively slow rate. The price transmission for black-tiger shrimp and white-leg shrimp was symmetric in the short run and the long run. The findings of this study are useful for farmers in developing production and business strategy. Symmetric price transmission in both the short run and the long run is a positive signal for farmers to invest in sustainable production approaches and to meet stringent standard requirements of the export market.