Price Transmission Analysis of Glutinous Rice Price in Thailand

Abstract

The purpose of this paper is to collect market information and analyze the structure of the glutinous rice market in Thailand in order to support the move towards the ASEAN Economic Community (AEC) in 2015. The
analysis focused on the relationship between price transmission and monthly glutinous rice prices in different market levels between 1997 and 2010 (158 months in total). The results revealed that the change of glutinous rice prices at farm, regional, wholesale, and export levels were in the same direction. The results of the estimation of the elasticity
of price transmission indicated that Thailand’s glutinous rice market is quite competitive and price transmission is effcient. However, the study showed that the export market of glutinous rice is less competitive than the domestic market. Therefore, the exporters can take advantage of the margins from the changes in glutinous rice prices the most, while the higher-quality glutinous rice market is quite more monopolized than the poorer-quality glutinous rice market. This implies that Thai glutinous rice exporters are still able to maintain the leadership in determining the price of high-quality glutinous rice in the export market. Thus, the intervention of glutinous rice prices is not very helpful. The government should focus on expanding the market to other countries, while maintaining the confdence in and the quality of Thai glutinous rice in foreign markets in order to help increase the price of glutinous rice in the
domestic market.