Cotton marketing in the Philippines.
1991
Abansi C.L.
The seedcotton market as an input market was characterized as oligopsony because the number of buyers is greater than one but still small enough so that competitive buying at constant prices is not maintained. The strongest barriers to entry was the huge investment needed not only for fixed capital outlay but for operating requirement as well. Analysis of domestic price formation showed that foreign exchange condition, world prices and market distortions significantly affected the price of cotton. Examination of marketing margins pinpointed the lucrativeness of the cotton marketing business. The test for spatial market integration revealed a low degree of market integration between farm and wholesale markets. Changes in lint prices were poorly transmitted to farm prices consequently leading to a widening of the farm-wholesale margin. Results of temporal integration test pointed out that the monthly price increases did not adequately cover the financial cost of storage.
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