Investigating the Impact of International Markets on Imported and Exported Non-Cereal Crops in Bangladesh

To maintain a sustainable market for major non-cereal crops in Bangladesh, the present study evaluated the asymmetric effect of the key macroeconomic variables on the imported and exported non-cereal crops. In this connection, this study evaluated the nonlinear interactions and comovements between the international market indicators such as the world prices, total trade amount, and gross domestic product per capita (GDPPC) and the market prices of potato and rapeseed in Bangladesh. Using yearly data from 1988 to 2019, we used the nonlinear autoregressive distributed lag (NARDL) model to investigate both short- and long-term market dynamics concerning the positive and negative shocks in the macroeconomic variables on imported and exported non-cereal crops. First, the study identifies that during the period investigated, the world potato and rapeseed prices led to an increase in the Bangladesh potato and rapeseed prices when they are increasing. Second, we find that the changes in the trade volume only have an influence on the potato price, both in the long-run and short-run. Finally, our findings revealed that domestic rapeseed prices tend to decrease when the GDPPC increases. Our empirical findings imply that it is important for market participants of potato and rapeseed in Bangladesh to take into consideration the sensitivity of the above-mentioned variables when designing resource allocation decisions in the event of positive and negative effects.

Automated summary

The study found that the world potato and rapeseed prices increase led to a rise in the prices of potato and rapeseed in Bangladesh; trade volume changes have an impact on the potato price in both the long run and short run; domestic rapeseed prices tend to decrease when the GDPPC increases.