Responding to import surges: Price transmission from international to local soybean markets

Understanding the determinants of price transmission is critical for designing effective policies to cope with grain price fluctuations and protect vulnerable consumers and producers. This study investigates transmission patterns of soybean prices from international to local markets in different contexts of import dependency. Empirical results suggest that price transmission is more pronounced in the low-import dependency period than in the high-import dependency period. We find suggestive evidence that policy intervention and market power are important explanations for this price phenomenon.