Agricultural Economics and Development

Agricultural Economics and Development

Asymmetric Effects of Exchange Rate Volatility on Poultry Input Prices in Iran

Document Type : Original Article

Authors
A Bahrami fard 1
M.H. Tarazkar 2
Z. Shokoohi 3
1 PhD Student in Agricultural Economics, Shiraz University, Shiraz, Iran.
2 Assistant Professor, Department of Agricultural Economics, Shiraz University, Shiraz, Iran.
3 Assistant Professor, Department of Agricultural Economics, Shiraz University, Shiraz, Iran
10.30490/aead.2022.342124.1206
Abstract
Input prices are one of the main components in determining the price of poultry meat and identifying the factors affecting the input prices is one of the major issues faced by governments. Thus, this study aimed at identifying the relationship between the input prices used in poultry sub-sector and exchange rate volatility in Iran. For this purpose, the Nonlinear Autoregressive Distributed Lag (NARDL) approach and seasonal data were used for the period of spring 2004 to winter 2018. Regarding the seasonality of the data, the HEGY stationary test was used to investigate the presence of seasonal and non-seasonal unit roots. The results showed that the prices of all inputs except for domestic fish powder were cointegrated with GDP and exchange rate volatility; also among the inputs of poultry sub-sector, the domestic corn price had an asymmetric behavior against exchange rate shocks in the either short-term or long-term, while the prices of foreign corn in the short run and compounded feed of laying hens in the long run had asymmetric behavior. According to the asymmetric behavior of corn input price in the face of exchange rate volatility, and given that this corn input accounts for more than half of the poultry feed, using appropriate exchange rate policies and stabilizing the process of these policies can help further stabilize the poultry market; in addition, it would be incorrect and biased to consider the absolute value of the effects of foreign exchange policies on input prices in both short and long terms due to its asymmetry.
Keywords
Exchange Rate
Inputs Price
Poultry Subsector
HEGY Test
NARDL
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