Price Sensitivity on the Global Wheat Market

Łopaciuk Wiesław () and Rembisz Włodzimierz ()
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Łopaciuk Wiesław: Wiesław Łopaciuk, PhD, Institute of Agricultural and Food Economics National Research Institute, Department of Agricultural Markets and Quantitative Methods; ul. Świętokrzyska 20, 00-002 Warsaw, Poland
Rembisz Włodzimierz: PhD, DSc, ProfTit, Institute of Agricultural and Food Economics National Research Institute, Department of Agricultural Markets and Quantitative Methods; ul. Świętokrzyska 20, 00-002 Warsaw, Poland

Zagadnienia Ekonomiki Rolnej / Problems of Agricultural Economics, 2024, vol. 380, issue 3, 66-89

Abstract: This article concerns the issue of price sensitivity on the global wheat market, understood as the ratio of the change in prices to the change in the volume of harvests and stocks as supply variables. This sensitivity was investigated using a model approach, applying it to the market as a whole and to exporting and importing countries. To capture the essence of this sensitivity, a simplifying assumption was made about demand as an a priori given variable. The results of the study indicate that with large amplitudes of changes in both the volume of harvests and stocks as well as price levels, the level of price sensitivity, i.e., how prices react in percentage terms to a 1% change in harvests and stocks, is relatively low. At the same time, this sensitivity is greater for harvests than for stocks. The aim of the study is to present general trends in the price sensitivity coefficient. The period of empirical analysis covers almost 60 years. The results of the study are of both cognitive and utilitarian significance, in particular for methods of prediction and forecasting of the market situation and for agricultural policy formulation. It is also a politically important issue at the moment.

Keywords: price sensitivity; market microeconomics; wheat market; price changes (search for similar items in EconPapers)
JEL-codes: O13 Q02 Q11 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:zerpae:v:380:y:2024:i:3:p:66-89:n:1004

DOI: 10.30858/zer/190894

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