The influence of international agricultural market prices on Macedonian domestic agricultural market : tomato case

Abstract: This project deals with co-movement of prices and market integration between the Macedonian domestic tomato market and other regional markets in South East part of Europe. This master thesis research investigates for price transmission between spatially separated markets. Consequently, it’s trying to comprehend to what extend markets are integrated and to give evidence about the direction of price causality. Main objective is to investigate if price changes at international markets are filtered to the domestic market. Therefore, to prove or deny existence of influence of international market prices when formulating the prices in the domestic market. Various tests are applied in order to test for market integration, co-movement and causality of prices between the markets. Price leadership and direction of price causality is essential in order to reach this thesis objective. Monthly retail market prices from the concerned markets are gathered for several years and price time series are formed. Using the general purpose computer package software STATA these price series were accordingly tested and analyzed. Results are properly analyzed and conclusions are given. Accordingly, in addition to the conclusions appropriate suggestions are given to tomato producers, the farmers and the entire industry in general.