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Pricing‐To‐Market Analysis: The Case of EU Wheat Exports
Author(s) -
Dawson Philip,
Gorton Matthew,
Hubbard Carmen,
Hubbard Lionel
Publication year - 2017
Publication title -
journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.157
H-Index - 61
eISSN - 1477-9552
pISSN - 0021-857X
DOI - 10.1111/1477-9552.12199
Subject(s) - destinations , unit (ring theory) , currency , international economics , exchange rate , product (mathematics) , economics , monetary economics , differential (mechanical device) , business , international trade , tourism , mathematics , mathematics education , geometry , engineering , political science , law , aerospace engineering
The EU is a major player in the global wheat market. This paper examines the pricing behaviour of EU wheat exporters using a pricing‐to‐market ( PTM ) analysis. Wheat is an exemplary product for testing PTM theories as it is widely and frequently traded, and largely unbranded. We estimate the relationship between export unit values and exchange rates using quarterly panel data for 11 EU export destinations for 2000–2013. Results show that there is a meaningful long‐run relationship between export unit values and exchange rates, but there is little evidence of differential mark‐ups between EU export markets. Belarus and Iceland are exceptions where exporters from the EU appear to exercise local currency price stabilisation.