Given the amount of information presented and its uneven composition in terms of countries, products and types of price, it is difficult to draw definite generalizations. A summary overview of the results is presented in Table 37, in which “yes” and “no” summarize the overall conclusion about the presence or absence of price transmission between the world market and the domestic markets, and within the domestic markets, while empty cells indicate that either the results did not allow for a firm conclusion, or the absence of the relevant data for a product in a country. In general, considering the results altogether, there are at least three regular features that can be identified, and few unexpected insights.
Firstly, there is a geographical regularity. Results for African countries generally tend to show a lower degree of price transmission compared to that of other countries. This is partly the result of the amount of information available, which is relatively little for Senegal, Ghana, and Ethiopia; but at least for Uganda and Egypt a considerable amount of information is available, and the generalized low level of price transmission with world reference prices appears quite clearly in both countries. Physical barriers, infrastructural gaps, together with remoteness and limited market sizes, are all elements to be further investigated in order to gain a wider understanding of the specific cases. Among the other areas, instead, transmission appears relatively complete in Asian countries, while the picture is somehow more mixed in Latin America for which, however, information available in the data set is far more limited.
A second regular feature of the results is that vertical transmission between the producer, the wholesale, and the retail level within the countries appears generally higher than the transmission of changes in the world reference prices. This is reasonable, given that geographical and infrastructural distances are likely to imply more substantive stationary transaction costs. However, this applies far less to the relation between the retail, wholesale and domestic prices included in the database, and the trade unit values retrieved from FAOSTAT. In other words, transmission between the domestic and the border prices is fairly incomplete in many countries in which the domestic markets appears to be fairly integrated.
A third regularity that appears in the results is that high and fast transmission is relatively more frequent for cereals, followed by oilseeds, while it is generally poorer for livestock products. This is a direct consequence of the overall character of these markets, and of their degree of integration and product homogeneity, which appears to be reflected in the results.
Coming to the less predictable outcomes, the main ones have to do with policies. In more than one case evidence of price transmission emerged for products and countries that are known to be deeply regulated by public intervention. This is the case of the evidence on wheat in Egypt, on cereals in India and Pakistan, and on local rice in Indonesia. Although more in depth investigations may be required in these markets to better qualify the results and to increase the confidence in their firmness, they still indicate that in the long run also an interventionist policy environment cannot prevent domestic prices from following world price trends and signals, and/or that that policy makers were taking into account world market trends in managing of domestic markets.
These results may also provide insights for policy modelling. In this area, for instance, floor prices and other main price polices have been often represented as simple wedges between the domestic and the world prices, typically the market price components of the OECD Producer Support Estimates. Depending on the floor price level relatively to the world price level, this may overstate significantly the distortionary impact of such measure if, as it appeared from this work for the Egyptian wheat and the Indonesian rice, world price signals are transmitted in the domestic market.
