Scientific Publications

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

By 17th September 2021September 19th, 2021No Comments
I.Duric, M.Svanidze, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), 06120 Halle, Germany
Agriculture 202111(8), 799;
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.