Price Behaviour and Market Integration: Preliminary Evidencefrom the Ukrainian and European Union Rapeseed Markets

Mariusz Hamulczuk1, Oksana Makarchuk2, Edgardo Sica3
1 Warsaw University of Life Sciences – SGGW, 2 National University of Life and Environmental Sciences of Ukraine – NULES of Ukraine, 3 University of Foggia, Italy
https://doi.org/10.22630/PRS.2019.19.1.4
Hamulczuk, Mariusz; ORCID: 0000-0002-4956-8516 (Warsaw University of Life Sciences – SGGW)
Makarchuk, Oksana; ORCID: 0000-0002-5997-5879 (National University of Life and Environmental Sciences of Ukraine – NULES of Ukraine)
Sica, Edgardo; ORCID: 0000-0001-9054-8309 (University of Foggia, Italy)
Price Behaviour and Market Integration: Preliminary Evidencefrom the Ukrainian and European Union Rapeseed Markets
Zeszyty Naukowe SGGW w Warszawie - Problemy Rolnictwa Światowego, 2019, vol.19(34), nr 1, s. 47-58

Słowa kluczowe

price behavior horizontal market integration Ukraine European Union rapeseed market

Key words

price behavior horizontal market integration Ukraine European Union rapeseed market

JEL Classification

F1 F6 Q1 C5

Streszczenie

This paper aims to provide preliminary evidence about the existence of horizontal integration between the rapeseed markets in Ukraine (UA) and the European Union (EU). To this end, both a trade analysis and a price analysis were carried out. In particular, the trade analysis was performed using yearly trade flows between the UA and EU, whereas price co-movement was assessed by means of linear vector error correction model (VECM) applied to weekly prices for rapeseed from 2008 to 2018. Our findings provide evidence of strong integration between the UA and EU markets in terms of the trade of rapeseeds, rape cake, and rape oil, as well as high horizontal rapeseed price transmission between the two economies.

Abstract

This paper aims to provide preliminary evidence about the existence of horizontal integration between the rapeseed markets in Ukraine (UA) and the European Union (EU). To this end, both a trade analysis and a price analysis were carried out. In particular, the trade analysis was performed using yearly trade flows between the UA and EU, whereas price co-movement was assessed by means of linear vector error correction model (VECM) applied to weekly prices for rapeseed from 2008 to 2018. Our findings provide evidence of strong integration between the UA and EU markets in terms of the trade of rapeseeds, rape cake, and rape oil, as well as high horizontal rapeseed price transmission between the two economies.