Global Wheat Market Dynamics: What Is the Role of the EU and the Black Sea Wheat Exporters?

Miranda Svanidze and Ivan Đurić
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Miranda Svanidze: Leibniz Institute of Agricultural Development in Transition Economies (IAMO), 06120 Halle, Germany
Ivan Đurić: Leibniz Institute of Agricultural Development in Transition Economies (IAMO), 06120 Halle, Germany

Agriculture, 2021, vol. 11, issue 8, 1-13

Abstract: Over the last two decades, three countries in the Black Sea Region—Russia, Ukraine, and Kazakhstan—became global leaders in grain production and trade, and replaced the USA and France as the most previous largest wheat exporting countries. In this study we investigate world wheat price linkages and identify the current “price leaders” of the global wheat market. This empirical analysis is focused on the price relationships between eight of the largest wheat exporting countries and uses a cointegration framework and a vector error-correction model. The results show that, regarding price formation on the world wheat market, the French price is more important for transmitting price signals to other wheat export markets compared to the USA. Furthermore, our results indicate that, despite being leaders in wheat export volumes, the Black Sea wheat prices in Russia and Ukraine adjust to price changes in France, the USA, and Canada. Albeit unrealistic in the short run, the creation of the futures market in the Black Sea region might significantly improve the participation of Black Sea markets in price formation of the global wheat market.

Keywords: price transmission; Black Sea; EU; wheat market; global markets; grain trade (search for similar items in EconPapers)
JEL-codes: Q1 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q17 Q18 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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