ANALYSIS OF INTEGRATION BETWEEN QUEENSLAND FEED AND MALTING BARLEY MARKETS

Gali, Jyothi; Brown, Colin G.

ANALYSIS OF INTEGRATION BETWEEN QUEENSLAND FEED AND MALTING BARLEY MARKETS

2017

Gali, Jyothi | Brown, Colin G.

Barley can be differentiated into feed and malting barley based on its end-use markets.Substitutability both in supply and in demand complicates analysis of price information in the barleymarket. The paper examines the price linkages between feed and malting barley in the Queenslandbarley market by using cointegration and error correction models. Malting barley prices respond torestore equilibrium relationships with corresponding feed barley prices in the long run, but not viceversa. Thus there appears to be a price leadership role for feed barley, and one-way substitutabilityand quality differences in the barley market.

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