Asymmetric price transmission in the commercialization of rice in Brazil

Abstract

This paper aims to investigate the presence of price transfer asymmetry (APT) in the rice production chain in Rio Grande do Sul incorporating in the analysis the effects of public policy interventions, specifically the agricultural minimum prices. The results indicate the occurrence of positive APT among all relations analyzed (contemporaneous, lagged or cumulative) in the rice production chain. In general, the industry-producer relationship presented the best adjustment and the existence of positive asymmetry indicates that this market link takes advantage of the direct relationship with the producer to pass through price increases more quickly reductions to its consumers. Finally, it was identified that in periods of market prices below the minimum price, the symmetry was not rejected, indicating its permanence in times of greater government intervention.