Exchange rate pass-through to the price of Imported Soybean Meal and Maize

Document Type : Original Article

Authors

1 Corresponding Author and Assistant Professor, Agricultural Planning, Economic and Rural Development Research Institute. Tehran. Iran(e.javdan@agri-peri.ac.ir) e.javdan@agri-peri.ac.ir

2 Assistant Professor, Agricultural Planning, Economic and Rural Development Research Institute. Tehran. Iran

3 Assistant Professor, Agricultural Planning, Economic and Rural Development Research Institute. Tehran. Iran.

10.30490/aead.2023.359780.1459

Abstract

Following the exchange rate fluctuations, with the aim of preventing the jump in the prices of imported livestock and poultry feed inputs such as soybean meal and corn, the estate has chosen the policy of allocation preferential currency to the import of these inputs from May 2017. Therefore, in this study, using monthly data in the period 2009:3-2019:11, the Impact of the exchange rate pass-through to the price of two imported inputs has been investigated. The results indicated that due to the non-linear relationship between the variables, it was appropriate to use the non-linear Markov switching model. Also, three stable regimes have been identified for maize and two stable regimes for soybean meal. Passing of the exchange rate for the price of maize in zero and one regimes is significant and in the short term, the exchange rate pass-through in the zero and one regimes is 12 and 20%, respectively, if the long-term rate of passing in the mentioned regimes It is estimated at 20 and 16 percent, respectively. For soybean meal, the passing rate of the exchange rate in the regime is significant and the passing rate in the short term and long term is 19 and 22, respectively. After the changes in the preferential currency policy, although the compensation payment to households in being implemented but it is necessary to implement the facilities for the financing of producers as consumers of imported inputs.

Keywords

Main Subjects

Agricultural Economics and Development

Articles in Press, Accepted Manuscript
Available Online from 06 August 2023

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