Title: Export instability when international agricultural markets operate under oligopoly
Author: Daniel E. May
Address: Department of Land, Farm and Agribusiness Management, Harper Adams University, Newport, Shropshire TF10 8NB, UK
Abstract: Current evidence has revealed that international markets of a number of agricultural commodities operate under oligopoly. This paper uses a theoretical framework to show that under this market imperfection and when farmers do not have perfect information about the prices they will receive in the future, an unstable model arises. It is predicted from this result that high degree of export instability might arise as countries continue to sign international trade agreements. The paper argues that in order to minimise this problem, informational strategies should be implemented at the farming level.
Keywords: export instability; oligopolistic international markets; farming industry; agriculture; agricultural markets; oligopoly; future prices; pricing information; international trade agreements.
Int. J. of Trade and Global Markets, 2015 Vol.8, No.2, pp.142 - 151
Submission date: 07 Jul 2014
Date of acceptance: 06 Dec 2014
Available online: 15 May 2015