All Issue

2023 Vol.35, Issue 4 Preview Page

Research Article

Impact of Fluctuations in the Prices of Imported Grains on the Consumer Prices of Processed Foods in Korea
Taeyang Kim1
,
Sanghyeon Lee2*
1Ph.D. Student, Food and Resource Economics, Korea University and Senior researcher, Science and Technology Policy Institute, Sejong 30147, Korea
2Associate Professor, Food and Resource Economics, Korea University, Seoul 02841, Korea
*Corresponding Author
31 December 2023. pp. 512-532
PDF XML Citation
Abstract

Recently, grain prices have fluctuated significantly worldwide, owing to the coronavirus disease 2019 pandemic and ongoing Russia–Ukraine War crisis. These fluctuations in the prices of food grains may affect the food prices of importing countries differently, depending on their size and location. In this study, we analyzed the effects (both short- and long-term) of the asymmetric trend of imported grain prices on consumer prices of processed foods in Korea. We conducted a nonlinear autoregressive distributed lag analysis using monthly data for the last 10 years (from July 2013 to July 2023) to address two major questions. First, we examined the effects of fluctuations in the prices of imported grains on the consumer prices of processed foods in Korea. Second, the impact of this price transfer phenomenon on the prices of bread and snacks was analyzed, focusing on fluctuations in the price of wheat (a major ingredient constituting a high proportion of imported food grains). We found that the prices of imported grains exhibited an asymmetry in the long run, and the prices of Korean processed foods increased only during an increase in imported food grain prices. In addition, it was confirmed that the prices of bread and snacks were asymmetrical over the long term in response to fluctuations in the price of wheat. Based on our results, we suggest a policy direction and discuss the need for alternatives to stabilize the prices of processed foods.

Keywords
Asymmetry
Grain
NARDL
Price
Processed food
References
1
Ahn, B. I., Han, D. B. (2012) Review of Various Viewpoints on Food Security and Policy Implications. KAAFP 39:815-840.
2
Banerjee, A., Dolado, J., Mestre, R. (1998) Error correction mechanism tests for co integration in a single equation framework. J Time Ser Anal 19:267-283. 10.1111/1467-9892.00091
3
Enders, W. (2014) Applied Econometric Time Series(4th edition). p.496. Wiley, USA.
4
Engle, Robert F., Granger, C. W. J. (1987) Co-Integration and Error Correction: Representation, Estimation, and Testing. Econom Soc Monogr 55:251-276. 10.2307/1913236
5
Jeong, W. H. (2018) The Impact of Agricultural Productivity and Grain Imports on Food Security in Developing Countries. World grain market 7:95-118.
6
Karina, H. C., Kim, K. C. (2022) Agricultural Supply Chain Risk Management Strategy in Response to the Russia-Ukraine Crisis. JITI 23:153-165.
7
KB Financial Group (2020) Trends in the Domestic Bakery Market and Changes in Consumption Trends. KB Self-Employment Analysis Report 5. Seoul, Korea.
8
KDCA (2022) Korea Health Statistics 2020: Korea National Health and Nutrition Examination Survey (KNHANES VIII-3). Korea Disease Control and Prevention Agency, Cheongju, Korea.
9
KHIDI (2018) Study on the Food Situation of Socio-Economic Vulnerable Groups for the Implementation of Food Security in Seoul. Seoul Metropolitan Government Report. Korea Health Industry Development Institute, Cheongju, Korea.
10
KIEP (2023) Concerns Over Deepening Food Crisis in Africa, as Seen Through Big Data: Russia's Declaration to Terminate the Black Sea Grain Agreement. KIEP EMERiCs August issue. Korea institute for International Economic Policy, Sejong, Korea.
11
Kim, J. G., Park, S. G., Park, J. W. (2020) Analysis of the Impact of Imported Grain Prices on Consumer Prices. JRD 43:29-58.
12
Kim, J. J., Kim, J. Y. (2016) A Study on Developing an Early Warning Index for Worldwide Grain Markets Using an Artificial Neural Network Model. JRD 39:70-90.
13
Kim, S. H., Kim A. S., Choi, J. H. (2011) The analysis on the effects of change of international grain price on the processed food price in Korea. KJOAS 38:393-404.
14
Kim, T. H., Seung, J. H. (2009) Early Warning System on World Grain Prices Using Signal Approach. JRD 32:71-84.
15
KOSTAT (2022) SDGs in the Republic of Korea: Project Report 2022. Statistics Korea Repot. Statistics Korea (KOSTAT), Daejeon, Korea. 10.1787/c3390d56-en
16
KREI (2011) A Study on the Effect of International Raw Material Price Rise on Processed Food Prices. Korea Rural Economic Institute Report.
17
KREI (2014) Establishment of an International Grain Early Warning System. KREI Report. Korea Rural Economic Institute, Naju, Korea.
18
KREI (2020) International grain market impact and outlook due to the spread of COVID-19. KREI Issue Report 1855. Korea Rural Economic Institute, Naju, Korea.
19
KREI (2022) Impacts of Ukraine-Russia Conflict on Global Grain Prices. KREI Issue Report 205. Korea Rural Economic Institute, Naju, Korea.
20
Lee, J. W., Lee. J. H. (2014) Price Volatility and Spillovers between the Korean and International Grain Market. JIEB 27:1393-1412.
21
Park, E. Y., Bae, G. H. (2019) Financial Development and Economic Performance: A Nonlinear ARDL Analysis. RFIS 8:23-46.
22
Pesaran, M. H., Shin, Y., Smith, R. (2001) Bounds testing approaches to the analysis of level relationships. J Appl Econ 16:289-326. 10.1002/jae.616
23
Schorderet, Y. (2001) Revisiting Okun's law: an hysteretic perspective. University of California, Mimeo, San Diego, USA.
24
Shin, Y., Yu, B., Greenwood-Nimmo, M. J. (2014) Modelling Asymmetric Co-integration and Dynamic Multipliers in a Nonlinear ARDL Framework. Festschrift in Honor of Peter Schmidt, pp.281-314. 10.1007/978-1-4899-8008-3_9
25
Shin, Y., Yu, B., Greenwood-Nimmo, M. J. (2014) Modelling Asymmetric Cointegration and Dynamic Multipliers in a Nonlinear ARDL Framework. Festschrift in Honor of Peter, New York, USA. 10.1007/978-1-4899-8008-3_9
26
The New York Times (2023.07.20) Wheat prices remain high as concern grows about Black Sea instability and disruption to the grain supply. The New York Times, New York, USA.
27
Yoon, B. S, Kim, M. S. (2020) Estimation of Basis for Imported Grain and Comparison of Performance between Grain Purchasing Methods. World Grain Market 9:757-813.
28
Yoon, S. J., Lee, C. S., Yang, S. R. (2016) Development of Price Forecast Models for International Grains Using Artificial Neural Networks. KAEA 57:83-101.
Information
  • Publisher :Agriculture and Life Sciences Research Institute, Kangwon National University
  • Publisher(Ko) :강원대학교 농업생명과학대학 농업생명과학연구원
  • Journal Title :Journal of Agricultural, Life and Environmental Sciences
  • Journal Title(Ko) :농업생명환경연구
  • Volume : 35
  • No :4
  • Pages :512-532
  • Received Date : 2023-11-13
  • Revised Date : 2023-11-30
  • Accepted Date : 2023-12-04
  • DOI :https://doi.org/10.22698/jales.20230041
Journal Informaiton Journal of Agricultural, Life and Environmental Sciences Journal of Agricultural, Life and Environmental Sciences
Online Submission & Review System
  • NRF
  • KOFST
  • KISTI Current Status
  • KISTI Cited-by
  • KCI 문헌 유사도 검사
  • orcid
  • open access
  • ccl
Journal Informaiton Journal Informaiton - close