Investigating Market Integration and Price Transmission

Rice production in most of Asian countries has been increased more rapidly than population and this has been led to increase in supply and proportionately decrease in the real price of rice in world and domestic markets. Furthermore, together with growth in production and national gross income of the country per-capita income has been increased and also demand for rice at national and international level quality has been increased. In this case studying the market conditions of different qualities of rice including marketing margins, causative relations among the prices, market integrations in long term and finally price transferring and market integration in short term is the important consequence that can help policymakers and planners in their decision makings on research, production, distribution and marketing of rice strategic product. So, using the statistics from Jihad Agriculture Organization of Guilan Province in case of the price of rice qualities (items) including Sadri momtaz (S1), Sadri darge yek (S2), Sadri mamooli (S3) and Khazar (K1) during 1999-2009 market conditions of different qualities of rice was studied. Results show that impulses in wholesale prices in Khazar rice rapidly influence on-farm prices, however, in case of other rice qualities the rate and speed of this influence is low. But in wholesale-retail market for Sadri quality rice impulses influence strongly in wholesale price and this shows intense integration of these two rice markets in Iran. It is suggested that according to the different quality of rice verities, support policy design and decision making process assigned separately.