Agricultural Economics and Development

Agricultural Economics and Development

Measuring the Market Connection between the Iranian Rice Market and its Major Trade Partners in South Asia

Document Type : Original Article

Authors
Agricultural Economics. Agricultural Planning, Economic and Rural Development Research Institute
10.30490/aead.2026.367564.1706
Abstract
Rice is considered one of the essential and imported products of the Iranian household food basket. Therefore, a correct understanding of the relationship between the domestic rice market and global markets is of utmost importance. Therefore, in this paper, using price and quantity information on rice imports from major import partners (India and Pakistan) and domestic rice prices during the period 2001-2024 and applying the unit price test, the convergence of domestic markets and major import partners of Iranian rice (India and Pakistan) was examined. The results showed that in the long run, both import prices from India and Pakistan had a positive and significant effect on the price of Iranian rice producers; also, in each period, an average of 72 and 68 percent of the shocks entering the Iranian market are adjusted, which indicates a faster transmission of changes from the Pakistani market than from the Indian market. Then, using the Ravallion model, the index of market connection for the two markets of India and Pakistan was estimated to be 0.98 and 0.88, respectively, which despite their proximity to each other means that the Iranian market is more dependent on the Pakistani import market. According to the results, supporting high-yield domestic rice as an alternative to Pakistani rice (due to qualitative similarity), adapting the import time pattern to the time of rice price reduction in Pakistan, diversifying the main import sources and reducing dependence on Pakistan, and using smart market regulation tools instead of banning rice imports were suggested to reduce shocks caused by price increases.
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