Integrating Central American and International Food Markets : An Analysis of Food Price Transmission in Honduras and Nicaragua

In 2004 the Central American countries of Nicaragua, Honduras, Guatemala, El Salvador, Costa Rica, and the Dominican Republic signed the Dominican Republic-Central America Free Trade Agreement (DR-CAFTA) with the United States and are currently negotiating another agreement with the European Union and others. This study examines the dynamics among international and domestic food markets by assessing the transmission of international prices to domestic prices of key agriculture commodities in Honduras and Nicaragua. It analyzes to what degree, if at all, a change in the international price of a given food product influences the domestic price of that same good, at the level of the consumer and producer and in different regions in each country. This analysis provides important evidence of the price dynamics that guide public policy recommendations for a complementary agenda of agriculture trade liberaliza-tion in the region. There are two methods for analyzing the relationship between international and domestic prices. The first is to conduct a price wedge analysis-to evaluate the difference between international and domestic prices. The second method is to conduct a price transmission analysis by analyzing the variation in the percent growth of international versus domestic prices. Evidence from Nicaragua suggests that for most of the agriculture supply chains studied (except for beans) there is little competition in the country's domestic market structure. A few Nicaraguan companies own the majority share of the market, both to purchase and export agricultural products and to import and sell food domestically. Obtaining information about the structure of domestic agriculture and food markets could shed light on country-specific impediments from domestic market structure to increasing agriculture growth, reducing poverty, and improving rural competitiveness. Information on domestic market structure was difficult to obtain for this study, particularly for Honduras. But, even in a context where the domestic market structure concentrates purchasing and selling power in a few agribusiness companies, price transmission could be high.

Saved in:
Bibliographic Details
Main Authors: Arias, Diego, De Franco, Mario A.
Language:English
en_US
Published: World Bank, Washington, DC 2011-03-17
Subjects:ADDITIVES, AGRICULTURAL PRODUCTION, AGRICULTURE, BANANAS, BEEF, CENTRAL BANK, CLIMATE CHANGE, COCOA, COFFEE PRICES, COMMODITIES, COMMODITY, COMPETITIVE MARKET, COMPETITIVENESS, CONSUMER DEMAND, CONSUMER GOODS, CONSUMER PRICE, CONSUMER PRICES, CORN, COST INCREASE, COST STRUCTURES, DAIRY, DEMAND CURVE, DOMESTIC MARKET, DOMESTIC MARKETS, DOMESTIC PRICE, DOMESTIC PRICES, DRIVERS, EGGS, ELASTICITIES, ELASTICITY, ENVIRONMENTAL SUSTAINABILITY, EXCHANGE RATES, EXPENDITURES, EXPORT MARKET, FINANCIAL CRISIS, FINANCIAL MARKET, FOOD AVAILABILITY, FOOD CHAIN, FOOD MARKETS, FOOD POLICY, FOOD PRICE, FOOD PRICES, FOOD PRODUCT, FOOD PRODUCTION, FOOD PRODUCTS, FREE TRADE, FREE TRADE AGREEMENT, GRAINS, GROSS DOMESTIC PRODUCT, GROWTH RATES, INCOME, INPUT PRICES, INSURANCE, INTERNATIONAL MARKET, INTERNATIONAL MARKETS, INVENTORY, LIBERALIZATION, MAIZE, MARGINAL COST, MARKET DISTORTIONS, MARKET INTEGRATION, MARKET POWER, MARKET PRICE, MARKET RISKS, MARKET SHARE, MARKET STRUCTURE, MARKET STRUCTURES, MARKETING, MEAT, MONOPOLY, NOISE, PACKING, PADDY, PARTICULAR COUNTRIES, PORK, PRICE ADJUSTMENT, PRICE ADJUSTMENTS, PRICE BEHAVIOR, PRICE CHANGE, PRICE CHANGES, PRICE ELASTICITY, PRICE INCREASE, PRICE INCREASES, PRICE INDEX, PRICE INDICES, PRICE LEVELS, PRICE LISTS, PRICE SERIES, PRICE SUBSIDY, PRICE SUPPORT, PRICE VARIATIONS, PRICE VOLATILITY, PRODUCER PRICE, PRODUCER PRICE INDEX, PRODUCER PRICES, PRODUCT QUALITY, PUBLIC POLICIES, PUBLIC POLICY, PURCHASING, RAIL, RAIL TRANSPORT, REPUTATION, SALE, SILAGE, SOCIAL COSTS, SUBSTITUTE, SUBSTITUTION, SUGAR, SUGAR CANE, SUPPLIERS, SUPPLY CHAIN, SUPPLY CHAINS, SUSTAINABLE DEVELOPMENT, TECHNOLOGICAL CHANGES, TRANSACTION COSTS, TRANSPORT, TRANSPORT COSTS, TRANSPORT EFFICIENCY, TRANSPORT SECTOR, TRANSPORTATION, TRUCK TRANSPORT, TRUCKS, TRUE, VEHICLE, VEHICLES, VOLATILITY, WHEAT, WHEAT FLOUR, WHOLESALER, WHOLESALERS,
Online Access:http://documents.worldbank.org/curated/en/2011/03/17394091/integrating-central-american-international-food-markets-analysis-food-price-transmission-honduras-nicaragua
https://hdl.handle.net/10986/18018
Tags: Add Tag
No Tags, Be the first to tag this record!
id dig-okr-1098618018
record_format koha
institution Banco Mundial
collection DSpace
country Estados Unidos
countrycode US
component Bibliográfico
access En linea
databasecode dig-okr
tag biblioteca
region America del Norte
libraryname Biblioteca del Banco Mundial
language English
en_US
topic ADDITIVES
AGRICULTURAL PRODUCTION
AGRICULTURE
BANANAS
BEEF
CENTRAL BANK
CLIMATE CHANGE
COCOA
COFFEE PRICES
COMMODITIES
COMMODITY
COMPETITIVE MARKET
COMPETITIVENESS
CONSUMER DEMAND
CONSUMER GOODS
CONSUMER PRICE
CONSUMER PRICES
CORN
COST INCREASE
COST STRUCTURES
DAIRY
DEMAND CURVE
DOMESTIC MARKET
DOMESTIC MARKETS
DOMESTIC PRICE
DOMESTIC PRICES
DRIVERS
EGGS
ELASTICITIES
ELASTICITY
ENVIRONMENTAL SUSTAINABILITY
EXCHANGE RATES
EXPENDITURES
EXPORT MARKET
FINANCIAL CRISIS
FINANCIAL MARKET
FOOD AVAILABILITY
FOOD CHAIN
FOOD MARKETS
FOOD POLICY
FOOD PRICE
FOOD PRICES
FOOD PRODUCT
FOOD PRODUCTION
FOOD PRODUCTS
FREE TRADE
FREE TRADE AGREEMENT
GRAINS
GROSS DOMESTIC PRODUCT
GROWTH RATES
INCOME
INPUT PRICES
INSURANCE
INTERNATIONAL MARKET
INTERNATIONAL MARKETS
INVENTORY
LIBERALIZATION
MAIZE
MARGINAL COST
MARKET DISTORTIONS
MARKET INTEGRATION
MARKET POWER
MARKET PRICE
MARKET RISKS
MARKET SHARE
MARKET STRUCTURE
MARKET STRUCTURES
MARKETING
MEAT
MONOPOLY
NOISE
PACKING
PADDY
PARTICULAR COUNTRIES
PORK
PRICE ADJUSTMENT
PRICE ADJUSTMENTS
PRICE BEHAVIOR
PRICE CHANGE
PRICE CHANGES
PRICE ELASTICITY
PRICE INCREASE
PRICE INCREASES
PRICE INDEX
PRICE INDICES
PRICE LEVELS
PRICE LISTS
PRICE SERIES
PRICE SUBSIDY
PRICE SUPPORT
PRICE VARIATIONS
PRICE VOLATILITY
PRODUCER PRICE
PRODUCER PRICE INDEX
PRODUCER PRICES
PRODUCT QUALITY
PUBLIC POLICIES
PUBLIC POLICY
PURCHASING
RAIL
RAIL TRANSPORT
REPUTATION
SALE
SILAGE
SOCIAL COSTS
SUBSTITUTE
SUBSTITUTION
SUGAR
SUGAR CANE
SUPPLIERS
SUPPLY CHAIN
SUPPLY CHAINS
SUSTAINABLE DEVELOPMENT
TECHNOLOGICAL CHANGES
TRANSACTION COSTS
TRANSPORT
TRANSPORT COSTS
TRANSPORT EFFICIENCY
TRANSPORT SECTOR
TRANSPORTATION
TRUCK TRANSPORT
TRUCKS
TRUE
VEHICLE
VEHICLES
VOLATILITY
WHEAT
WHEAT FLOUR
WHOLESALER
WHOLESALERS
ADDITIVES
AGRICULTURAL PRODUCTION
AGRICULTURE
BANANAS
BEEF
CENTRAL BANK
CLIMATE CHANGE
COCOA
COFFEE PRICES
COMMODITIES
COMMODITY
COMPETITIVE MARKET
COMPETITIVENESS
CONSUMER DEMAND
CONSUMER GOODS
CONSUMER PRICE
CONSUMER PRICES
CORN
COST INCREASE
COST STRUCTURES
DAIRY
DEMAND CURVE
DOMESTIC MARKET
DOMESTIC MARKETS
DOMESTIC PRICE
DOMESTIC PRICES
DRIVERS
EGGS
ELASTICITIES
ELASTICITY
ENVIRONMENTAL SUSTAINABILITY
EXCHANGE RATES
EXPENDITURES
EXPORT MARKET
FINANCIAL CRISIS
FINANCIAL MARKET
FOOD AVAILABILITY
FOOD CHAIN
FOOD MARKETS
FOOD POLICY
FOOD PRICE
FOOD PRICES
FOOD PRODUCT
FOOD PRODUCTION
FOOD PRODUCTS
FREE TRADE
FREE TRADE AGREEMENT
GRAINS
GROSS DOMESTIC PRODUCT
GROWTH RATES
INCOME
INPUT PRICES
INSURANCE
INTERNATIONAL MARKET
INTERNATIONAL MARKETS
INVENTORY
LIBERALIZATION
MAIZE
MARGINAL COST
MARKET DISTORTIONS
MARKET INTEGRATION
MARKET POWER
MARKET PRICE
MARKET RISKS
MARKET SHARE
MARKET STRUCTURE
MARKET STRUCTURES
MARKETING
MEAT
MONOPOLY
NOISE
PACKING
PADDY
PARTICULAR COUNTRIES
PORK
PRICE ADJUSTMENT
PRICE ADJUSTMENTS
PRICE BEHAVIOR
PRICE CHANGE
PRICE CHANGES
PRICE ELASTICITY
PRICE INCREASE
PRICE INCREASES
PRICE INDEX
PRICE INDICES
PRICE LEVELS
PRICE LISTS
PRICE SERIES
PRICE SUBSIDY
PRICE SUPPORT
PRICE VARIATIONS
PRICE VOLATILITY
PRODUCER PRICE
PRODUCER PRICE INDEX
PRODUCER PRICES
PRODUCT QUALITY
PUBLIC POLICIES
PUBLIC POLICY
PURCHASING
RAIL
RAIL TRANSPORT
REPUTATION
SALE
SILAGE
SOCIAL COSTS
SUBSTITUTE
SUBSTITUTION
SUGAR
SUGAR CANE
SUPPLIERS
SUPPLY CHAIN
SUPPLY CHAINS
SUSTAINABLE DEVELOPMENT
TECHNOLOGICAL CHANGES
TRANSACTION COSTS
TRANSPORT
TRANSPORT COSTS
TRANSPORT EFFICIENCY
TRANSPORT SECTOR
TRANSPORTATION
TRUCK TRANSPORT
TRUCKS
TRUE
VEHICLE
VEHICLES
VOLATILITY
WHEAT
WHEAT FLOUR
WHOLESALER
WHOLESALERS
spellingShingle ADDITIVES
AGRICULTURAL PRODUCTION
AGRICULTURE
BANANAS
BEEF
CENTRAL BANK
CLIMATE CHANGE
COCOA
COFFEE PRICES
COMMODITIES
COMMODITY
COMPETITIVE MARKET
COMPETITIVENESS
CONSUMER DEMAND
CONSUMER GOODS
CONSUMER PRICE
CONSUMER PRICES
CORN
COST INCREASE
COST STRUCTURES
DAIRY
DEMAND CURVE
DOMESTIC MARKET
DOMESTIC MARKETS
DOMESTIC PRICE
DOMESTIC PRICES
DRIVERS
EGGS
ELASTICITIES
ELASTICITY
ENVIRONMENTAL SUSTAINABILITY
EXCHANGE RATES
EXPENDITURES
EXPORT MARKET
FINANCIAL CRISIS
FINANCIAL MARKET
FOOD AVAILABILITY
FOOD CHAIN
FOOD MARKETS
FOOD POLICY
FOOD PRICE
FOOD PRICES
FOOD PRODUCT
FOOD PRODUCTION
FOOD PRODUCTS
FREE TRADE
FREE TRADE AGREEMENT
GRAINS
GROSS DOMESTIC PRODUCT
GROWTH RATES
INCOME
INPUT PRICES
INSURANCE
INTERNATIONAL MARKET
INTERNATIONAL MARKETS
INVENTORY
LIBERALIZATION
MAIZE
MARGINAL COST
MARKET DISTORTIONS
MARKET INTEGRATION
MARKET POWER
MARKET PRICE
MARKET RISKS
MARKET SHARE
MARKET STRUCTURE
MARKET STRUCTURES
MARKETING
MEAT
MONOPOLY
NOISE
PACKING
PADDY
PARTICULAR COUNTRIES
PORK
PRICE ADJUSTMENT
PRICE ADJUSTMENTS
PRICE BEHAVIOR
PRICE CHANGE
PRICE CHANGES
PRICE ELASTICITY
PRICE INCREASE
PRICE INCREASES
PRICE INDEX
PRICE INDICES
PRICE LEVELS
PRICE LISTS
PRICE SERIES
PRICE SUBSIDY
PRICE SUPPORT
PRICE VARIATIONS
PRICE VOLATILITY
PRODUCER PRICE
PRODUCER PRICE INDEX
PRODUCER PRICES
PRODUCT QUALITY
PUBLIC POLICIES
PUBLIC POLICY
PURCHASING
RAIL
RAIL TRANSPORT
REPUTATION
SALE
SILAGE
SOCIAL COSTS
SUBSTITUTE
SUBSTITUTION
SUGAR
SUGAR CANE
SUPPLIERS
SUPPLY CHAIN
SUPPLY CHAINS
SUSTAINABLE DEVELOPMENT
TECHNOLOGICAL CHANGES
TRANSACTION COSTS
TRANSPORT
TRANSPORT COSTS
TRANSPORT EFFICIENCY
TRANSPORT SECTOR
TRANSPORTATION
TRUCK TRANSPORT
TRUCKS
TRUE
VEHICLE
VEHICLES
VOLATILITY
WHEAT
WHEAT FLOUR
WHOLESALER
WHOLESALERS
ADDITIVES
AGRICULTURAL PRODUCTION
AGRICULTURE
BANANAS
BEEF
CENTRAL BANK
CLIMATE CHANGE
COCOA
COFFEE PRICES
COMMODITIES
COMMODITY
COMPETITIVE MARKET
COMPETITIVENESS
CONSUMER DEMAND
CONSUMER GOODS
CONSUMER PRICE
CONSUMER PRICES
CORN
COST INCREASE
COST STRUCTURES
DAIRY
DEMAND CURVE
DOMESTIC MARKET
DOMESTIC MARKETS
DOMESTIC PRICE
DOMESTIC PRICES
DRIVERS
EGGS
ELASTICITIES
ELASTICITY
ENVIRONMENTAL SUSTAINABILITY
EXCHANGE RATES
EXPENDITURES
EXPORT MARKET
FINANCIAL CRISIS
FINANCIAL MARKET
FOOD AVAILABILITY
FOOD CHAIN
FOOD MARKETS
FOOD POLICY
FOOD PRICE
FOOD PRICES
FOOD PRODUCT
FOOD PRODUCTION
FOOD PRODUCTS
FREE TRADE
FREE TRADE AGREEMENT
GRAINS
GROSS DOMESTIC PRODUCT
GROWTH RATES
INCOME
INPUT PRICES
INSURANCE
INTERNATIONAL MARKET
INTERNATIONAL MARKETS
INVENTORY
LIBERALIZATION
MAIZE
MARGINAL COST
MARKET DISTORTIONS
MARKET INTEGRATION
MARKET POWER
MARKET PRICE
MARKET RISKS
MARKET SHARE
MARKET STRUCTURE
MARKET STRUCTURES
MARKETING
MEAT
MONOPOLY
NOISE
PACKING
PADDY
PARTICULAR COUNTRIES
PORK
PRICE ADJUSTMENT
PRICE ADJUSTMENTS
PRICE BEHAVIOR
PRICE CHANGE
PRICE CHANGES
PRICE ELASTICITY
PRICE INCREASE
PRICE INCREASES
PRICE INDEX
PRICE INDICES
PRICE LEVELS
PRICE LISTS
PRICE SERIES
PRICE SUBSIDY
PRICE SUPPORT
PRICE VARIATIONS
PRICE VOLATILITY
PRODUCER PRICE
PRODUCER PRICE INDEX
PRODUCER PRICES
PRODUCT QUALITY
PUBLIC POLICIES
PUBLIC POLICY
PURCHASING
RAIL
RAIL TRANSPORT
REPUTATION
SALE
SILAGE
SOCIAL COSTS
SUBSTITUTE
SUBSTITUTION
SUGAR
SUGAR CANE
SUPPLIERS
SUPPLY CHAIN
SUPPLY CHAINS
SUSTAINABLE DEVELOPMENT
TECHNOLOGICAL CHANGES
TRANSACTION COSTS
TRANSPORT
TRANSPORT COSTS
TRANSPORT EFFICIENCY
TRANSPORT SECTOR
TRANSPORTATION
TRUCK TRANSPORT
TRUCKS
TRUE
VEHICLE
VEHICLES
VOLATILITY
WHEAT
WHEAT FLOUR
WHOLESALER
WHOLESALERS
Arias, Diego
De Franco, Mario A.
Integrating Central American and International Food Markets : An Analysis of Food Price Transmission in Honduras and Nicaragua
description In 2004 the Central American countries of Nicaragua, Honduras, Guatemala, El Salvador, Costa Rica, and the Dominican Republic signed the Dominican Republic-Central America Free Trade Agreement (DR-CAFTA) with the United States and are currently negotiating another agreement with the European Union and others. This study examines the dynamics among international and domestic food markets by assessing the transmission of international prices to domestic prices of key agriculture commodities in Honduras and Nicaragua. It analyzes to what degree, if at all, a change in the international price of a given food product influences the domestic price of that same good, at the level of the consumer and producer and in different regions in each country. This analysis provides important evidence of the price dynamics that guide public policy recommendations for a complementary agenda of agriculture trade liberaliza-tion in the region. There are two methods for analyzing the relationship between international and domestic prices. The first is to conduct a price wedge analysis-to evaluate the difference between international and domestic prices. The second method is to conduct a price transmission analysis by analyzing the variation in the percent growth of international versus domestic prices. Evidence from Nicaragua suggests that for most of the agriculture supply chains studied (except for beans) there is little competition in the country's domestic market structure. A few Nicaraguan companies own the majority share of the market, both to purchase and export agricultural products and to import and sell food domestically. Obtaining information about the structure of domestic agriculture and food markets could shed light on country-specific impediments from domestic market structure to increasing agriculture growth, reducing poverty, and improving rural competitiveness. Information on domestic market structure was difficult to obtain for this study, particularly for Honduras. But, even in a context where the domestic market structure concentrates purchasing and selling power in a few agribusiness companies, price transmission could be high.
topic_facet ADDITIVES
AGRICULTURAL PRODUCTION
AGRICULTURE
BANANAS
BEEF
CENTRAL BANK
CLIMATE CHANGE
COCOA
COFFEE PRICES
COMMODITIES
COMMODITY
COMPETITIVE MARKET
COMPETITIVENESS
CONSUMER DEMAND
CONSUMER GOODS
CONSUMER PRICE
CONSUMER PRICES
CORN
COST INCREASE
COST STRUCTURES
DAIRY
DEMAND CURVE
DOMESTIC MARKET
DOMESTIC MARKETS
DOMESTIC PRICE
DOMESTIC PRICES
DRIVERS
EGGS
ELASTICITIES
ELASTICITY
ENVIRONMENTAL SUSTAINABILITY
EXCHANGE RATES
EXPENDITURES
EXPORT MARKET
FINANCIAL CRISIS
FINANCIAL MARKET
FOOD AVAILABILITY
FOOD CHAIN
FOOD MARKETS
FOOD POLICY
FOOD PRICE
FOOD PRICES
FOOD PRODUCT
FOOD PRODUCTION
FOOD PRODUCTS
FREE TRADE
FREE TRADE AGREEMENT
GRAINS
GROSS DOMESTIC PRODUCT
GROWTH RATES
INCOME
INPUT PRICES
INSURANCE
INTERNATIONAL MARKET
INTERNATIONAL MARKETS
INVENTORY
LIBERALIZATION
MAIZE
MARGINAL COST
MARKET DISTORTIONS
MARKET INTEGRATION
MARKET POWER
MARKET PRICE
MARKET RISKS
MARKET SHARE
MARKET STRUCTURE
MARKET STRUCTURES
MARKETING
MEAT
MONOPOLY
NOISE
PACKING
PADDY
PARTICULAR COUNTRIES
PORK
PRICE ADJUSTMENT
PRICE ADJUSTMENTS
PRICE BEHAVIOR
PRICE CHANGE
PRICE CHANGES
PRICE ELASTICITY
PRICE INCREASE
PRICE INCREASES
PRICE INDEX
PRICE INDICES
PRICE LEVELS
PRICE LISTS
PRICE SERIES
PRICE SUBSIDY
PRICE SUPPORT
PRICE VARIATIONS
PRICE VOLATILITY
PRODUCER PRICE
PRODUCER PRICE INDEX
PRODUCER PRICES
PRODUCT QUALITY
PUBLIC POLICIES
PUBLIC POLICY
PURCHASING
RAIL
RAIL TRANSPORT
REPUTATION
SALE
SILAGE
SOCIAL COSTS
SUBSTITUTE
SUBSTITUTION
SUGAR
SUGAR CANE
SUPPLIERS
SUPPLY CHAIN
SUPPLY CHAINS
SUSTAINABLE DEVELOPMENT
TECHNOLOGICAL CHANGES
TRANSACTION COSTS
TRANSPORT
TRANSPORT COSTS
TRANSPORT EFFICIENCY
TRANSPORT SECTOR
TRANSPORTATION
TRUCK TRANSPORT
TRUCKS
TRUE
VEHICLE
VEHICLES
VOLATILITY
WHEAT
WHEAT FLOUR
WHOLESALER
WHOLESALERS
author Arias, Diego
De Franco, Mario A.
author_facet Arias, Diego
De Franco, Mario A.
author_sort Arias, Diego
title Integrating Central American and International Food Markets : An Analysis of Food Price Transmission in Honduras and Nicaragua
title_short Integrating Central American and International Food Markets : An Analysis of Food Price Transmission in Honduras and Nicaragua
title_full Integrating Central American and International Food Markets : An Analysis of Food Price Transmission in Honduras and Nicaragua
title_fullStr Integrating Central American and International Food Markets : An Analysis of Food Price Transmission in Honduras and Nicaragua
title_full_unstemmed Integrating Central American and International Food Markets : An Analysis of Food Price Transmission in Honduras and Nicaragua
title_sort integrating central american and international food markets : an analysis of food price transmission in honduras and nicaragua
publisher World Bank, Washington, DC
publishDate 2011-03-17
url http://documents.worldbank.org/curated/en/2011/03/17394091/integrating-central-american-international-food-markets-analysis-food-price-transmission-honduras-nicaragua
https://hdl.handle.net/10986/18018
work_keys_str_mv AT ariasdiego integratingcentralamericanandinternationalfoodmarketsananalysisoffoodpricetransmissioninhondurasandnicaragua
AT defrancomarioa integratingcentralamericanandinternationalfoodmarketsananalysisoffoodpricetransmissioninhondurasandnicaragua
_version_ 1807156561103028224
spelling dig-okr-10986180182024-08-08T14:43:52Z Integrating Central American and International Food Markets : An Analysis of Food Price Transmission in Honduras and Nicaragua Arias, Diego De Franco, Mario A. ADDITIVES AGRICULTURAL PRODUCTION AGRICULTURE BANANAS BEEF CENTRAL BANK CLIMATE CHANGE COCOA COFFEE PRICES COMMODITIES COMMODITY COMPETITIVE MARKET COMPETITIVENESS CONSUMER DEMAND CONSUMER GOODS CONSUMER PRICE CONSUMER PRICES CORN COST INCREASE COST STRUCTURES DAIRY DEMAND CURVE DOMESTIC MARKET DOMESTIC MARKETS DOMESTIC PRICE DOMESTIC PRICES DRIVERS EGGS ELASTICITIES ELASTICITY ENVIRONMENTAL SUSTAINABILITY EXCHANGE RATES EXPENDITURES EXPORT MARKET FINANCIAL CRISIS FINANCIAL MARKET FOOD AVAILABILITY FOOD CHAIN FOOD MARKETS FOOD POLICY FOOD PRICE FOOD PRICES FOOD PRODUCT FOOD PRODUCTION FOOD PRODUCTS FREE TRADE FREE TRADE AGREEMENT GRAINS GROSS DOMESTIC PRODUCT GROWTH RATES INCOME INPUT PRICES INSURANCE INTERNATIONAL MARKET INTERNATIONAL MARKETS INVENTORY LIBERALIZATION MAIZE MARGINAL COST MARKET DISTORTIONS MARKET INTEGRATION MARKET POWER MARKET PRICE MARKET RISKS MARKET SHARE MARKET STRUCTURE MARKET STRUCTURES MARKETING MEAT MONOPOLY NOISE PACKING PADDY PARTICULAR COUNTRIES PORK PRICE ADJUSTMENT PRICE ADJUSTMENTS PRICE BEHAVIOR PRICE CHANGE PRICE CHANGES PRICE ELASTICITY PRICE INCREASE PRICE INCREASES PRICE INDEX PRICE INDICES PRICE LEVELS PRICE LISTS PRICE SERIES PRICE SUBSIDY PRICE SUPPORT PRICE VARIATIONS PRICE VOLATILITY PRODUCER PRICE PRODUCER PRICE INDEX PRODUCER PRICES PRODUCT QUALITY PUBLIC POLICIES PUBLIC POLICY PURCHASING RAIL RAIL TRANSPORT REPUTATION SALE SILAGE SOCIAL COSTS SUBSTITUTE SUBSTITUTION SUGAR SUGAR CANE SUPPLIERS SUPPLY CHAIN SUPPLY CHAINS SUSTAINABLE DEVELOPMENT TECHNOLOGICAL CHANGES TRANSACTION COSTS TRANSPORT TRANSPORT COSTS TRANSPORT EFFICIENCY TRANSPORT SECTOR TRANSPORTATION TRUCK TRANSPORT TRUCKS TRUE VEHICLE VEHICLES VOLATILITY WHEAT WHEAT FLOUR WHOLESALER WHOLESALERS In 2004 the Central American countries of Nicaragua, Honduras, Guatemala, El Salvador, Costa Rica, and the Dominican Republic signed the Dominican Republic-Central America Free Trade Agreement (DR-CAFTA) with the United States and are currently negotiating another agreement with the European Union and others. This study examines the dynamics among international and domestic food markets by assessing the transmission of international prices to domestic prices of key agriculture commodities in Honduras and Nicaragua. It analyzes to what degree, if at all, a change in the international price of a given food product influences the domestic price of that same good, at the level of the consumer and producer and in different regions in each country. This analysis provides important evidence of the price dynamics that guide public policy recommendations for a complementary agenda of agriculture trade liberaliza-tion in the region. There are two methods for analyzing the relationship between international and domestic prices. The first is to conduct a price wedge analysis-to evaluate the difference between international and domestic prices. The second method is to conduct a price transmission analysis by analyzing the variation in the percent growth of international versus domestic prices. Evidence from Nicaragua suggests that for most of the agriculture supply chains studied (except for beans) there is little competition in the country's domestic market structure. A few Nicaraguan companies own the majority share of the market, both to purchase and export agricultural products and to import and sell food domestically. Obtaining information about the structure of domestic agriculture and food markets could shed light on country-specific impediments from domestic market structure to increasing agriculture growth, reducing poverty, and improving rural competitiveness. Information on domestic market structure was difficult to obtain for this study, particularly for Honduras. But, even in a context where the domestic market structure concentrates purchasing and selling power in a few agribusiness companies, price transmission could be high. 2014-04-22T21:43:43Z 2014-04-22T21:43:43Z 2011-03-17 http://documents.worldbank.org/curated/en/2011/03/17394091/integrating-central-american-international-food-markets-analysis-food-price-transmission-honduras-nicaragua https://hdl.handle.net/10986/18018 English en_US LCSSD occasional paper series on food prices; CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ application/pdf text/plain World Bank, Washington, DC