Market integration and price transmission in theworld rice export markets

This paper investigates market integration and asymmetric price transmission in the world rice export markets. Using monthly rice prices from Thailand, Vietnam, and United States, we employ the Johansen test and estimate the threshold vector error correction model (TVECM). Our main findings are that export prices in the three countries are cointegrated, with Thailand and the United States the price leaders, and that the Vietnamese price adjusts faster to long-run equilibrium when it is above its equilibrium level with Thai and U.S. prices. These results suggest market integration and competition rather than collusion are prevalent in world rice markets. Policy implications are also briefly discussed.