Investigating the international prices of wheat and rice
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Rezitis, Anthony
Pachis, Dimitris
Ntinou, Anastasia
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Abstract
This paper investigates the international quarterly prices of wheat and rice from
1983(1) to 2012(4). The empirical analysis takes place with the structural time series
methodology which decomposes the price series into their trend, cycle, seasonal
and irregular components. The empirical results indicate that wheat prices present
cyclical behavior while rice prices except for cyclicality are mainly governed by the
irregular component. The results strain the importance of treating wheat and rice like
two distinct commodities that require country specific and commodity specific policy
measures. Finally, the impact of the shrinking Chinese grain stocks after 2002 is proposed
as an important factor that resulted in the 2008 price spike.
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Keywords
Structural time series, International prices, Wheat, Rice