2004年-世界发展银行全球_The_Impact_of_Coffee_Market____________Reforms_on_Producer_Prices_and_Price_Transmission_39页_348kb

Summary of "THE IMPACT OF COFFEE MARKET REFORMS ON PRODUCER PRICES AND PRICE TRANSMISSION"

Core Content

This paper investigates the impact of coffee market reforms in the late 1980s and early 1990s on producer prices and the transmission of world market prices to domestic markets. The main focus is on how these reforms affected the share of world prices received by coffee growers and the efficiency of price transmission.

Main Objectives

• To evaluate whether coffee market reforms increased the share of world market prices received by producers.
• To assess whether the reforms improved the transmission of price signals from the world market to domestic producers.
• To test for asymmetric price transmission, i.e., whether price increases and decreases are transmitted differently to domestic markets.

Key Findings

• Long-term producer price share increased in most countries after the reforms, indicating that producers received a larger portion of the world price.
• Short-term price transmission improved, meaning that domestic prices adjust faster to world price fluctuations post-reforms.
• Asymmetric price transmission was observed, with some evidence that price decreases are transmitted more effectively than price increases to domestic markets.
• Full liberalization of markets (e.g., Brazil, Mexico, India, Uganda, etc.) led to almost instantaneous price pass-through, whereas countries with partial liberalization or continued restrictions (e.g., Kenya, Tanzania, Angola, Colombia) showed less improvement in price transmission.

Country-Specific Outcomes

• Brazil, Mexico, India, Uganda, Madagascar, and Ethiopia saw significant increases in producer price shares.
• Uganda experienced an increase of nearly 50 percentage points in the producer price share following liberalization.
• Angola and Tanzania were exceptions:
  • In Angola, producer prices remained artificially high even as world prices dropped, leading to a low share of world prices.
  • In Tanzania, the arabica price share decreased slightly, while robusta increased, possibly due to a decline in coffee quality.

Structural Reforms

• Most countries in Sub-Saharan Africa and Latin America implemented structural adjustment reforms that included:
  • Liberalization of export markets.
  • Replacement of marketing boards with private traders.
  • Removal of export taxes and minimum prices.
  • Simplification of trading procedures.
• However, the degree and timing of reforms varied significantly across countries, leading to divergent outcomes.

Methodology

• The study uses cointegration analysis and error-correction models (ECM) to estimate:
  • The speed of price adjustment.
  • The equilibrium share of producer prices in world prices.
  • The asymmetric transmission of price changes.
• Two types of dummy variables are used:
  • Policy dummies to capture the impact of reforms.
  • Price change dummies to test for asymmetric transmission.
• The Augmented Dickey-Fuller (ADF) test is applied to ensure stationarity of the time series data.

Model Specification

• The error-correction model is used to estimate the dynamic adjustment of domestic prices to world prices.
• The model includes:
  • Short-run transmission (captured by the parameter δ).
  • Long-run equilibrium (captured by the parameter γ).
  • Error-correction term (θ), which measures the speed of adjustment to the equilibrium.
• The adjustment degree after a one-time world price change is calculated using the formula:

$$
m_n = 1 - \frac{(\gamma - \delta)(1 + \theta)^n}{\gamma}
$$

• The results suggest that the degree of adjustment improved significantly post-reforms, especially in countries that fully liberalized their markets.

Data and Sources

• The data comes from the International Coffee Organization (ICO) and includes:
  • Monthly world market prices.
  • Prices paid to producers in approximately 20 coffee-exporting countries.
• The exchange rates used are monthly averages from the IMF.
• US import data is used to estimate actual export prices, as ICO data only provides average prices.

Conclusion

• The reforms generally improved price transmission and increased producer price shares.
• However, asymmetries in price transmission persist, with price decreases being transmitted more effectively than price increases.
• The degree of reform influences the magnitude of price transmission improvements.
• The role of marketing boards and government intervention continues to affect market efficiency and price dynamics in some countries.

Key Terms

• Producer price share: The proportion of the world market price that reaches the coffee grower.
• Price transmission: The process by which changes in world market prices are reflected in domestic producer prices.
• Asymmetric price transmission: The differential speed at which price increases and decreases are transmitted to domestic markets.
• Error-correction model (ECM): A dynamic econometric model that captures both short-run and long-run price adjustments.