International cereal prices have major impact on local markets in developing countries.
The article explores how prices are passed between different markets and what factors influence this process. The researchers looked at price transmission in various regions and products, considering factors like distance and borders. They used innovative methods to analyze large amounts of market data and found that international cereal prices affect local markets in developing countries. They discovered that most commodity markets are connected in the long term, with rice markets showing stronger connections than maize markets. On average, prices tend to adjust by about 0.75 in the long run and 0.09-0.11 in the short term.