Coffee price dynamics: an analysis of the retail-international price margin. (18th June 2021)

• Record Type: Journal Article
• Authors: Ghoshray, Atanu; Mohan, Sushil
• Is Part Of: European review of agricultural economics. Volume 48:Number 4(2021)
• Page Start: 983
• Page End: 1006
• Publication Date: 2021-06-18
• Subjects: coffee roasting industry -- coffee supply chain -- market power -- price dynamics -- price margin -- Momentum Threshold Autoregression (M-TAR); Agriculture -- Economic aspects -- Periodicals; Agriculture -- Economic aspects -- Europe -- Periodicals; 338.109405
• DOI: 10.1093/erae/jbab027
• Languages: English
• ISSNs: 0165-1587

Abstract

Abstract: We examine the dynamics of the margin between retail and international coffee prices from 1980 to 2018. We find no significant trend in the margin using a robust procedure for estimating a trend. Further, we establish that any deviations in the margin are transitory for the full sample as well as the periods prior to and after the demise of the ICA, but with asymmetric adjustment. One of the reasons for the observed asymmetry could be market concentration in the coffee supply chain at the coffee roasting level, which allows coffee roasters to keep a higher share of the profits.