Volatility and Integration of Maize Market: The Effect of CEPT-AFTA

• Main Authors: Beny Wahyudi, 王育迪
• Other Authors: Yessica C. Y. Chung
• Format: Others
• Language: en_US
• Published: 2017
• Online Access: http://ndltd.ncl.edu.tw/handle/jh99sq

碩士 === 國立屏東科技大學 === 農企業管理國際碩士學位學程 === 105 === Maize is the most important staple foods in the world. It has 19.5 percent share of global caloric intake of all sources of food. Maize is not only for human food, but also as animal feed, and food industries. Indonesia, Thailand, and the Philippines are countries that have the highest maize production, high consumption, and import in ASEAN. Trade liberalization has been realized by AFTA agreement in ASEAN. The purpose is to decrease trade barriers, increase economic integration, and establish a single market in ASEAN with through Common Effective Preferential Tariffs scheme for ASEAN Free Trade Area (CEPT-AFTA) by lower tariff until 0-5 percent. ASEAN-6 countries have begun to implement CEPT-AFTA since January 2010. This study uses Vector Error Correction Model (VECM) to test integration of maize price in Indonesia, Thailand, and the Philippines markets before and after CEPT-AFTA policy exists in ASEAN-6 with using monthly time series data from January 2004 to December 2015. Standard deviation is used to analyze maize price volatility. The result shows that the volatility of maize price in three markets is higher before CEPT-AFTA. Maize markets in three countries are more integrated before CEPT-AFTA period than after CEPT-AFTA period. This is because domestic policy can decrease maize market integration and price volatility. This study suggests ASEAN to enhance the removing import tariff policy and establish a price stability policy as a reference to ASEAN countries. Indonesia needs to adopt the seasonal restriction on maize import to stable the maize price. The role of NFA in maize price is needed to stabilize the maize price in Philippine. Keywords: CEPT-AFTA, Volatility and Market Integration, Maize, VECM