PRICE TRANSMISSION BETWEEN THE SUGAR AND ALCOHOLIC MARKETS IN SÃO PAULO AND PERNAMBUCO IN THE PERIOD FROM 2003 TO 2021

Authors

DOI:

https://doi.org/10.61673/ren.2024.1550

Keywords:

Sugar cane, Ethanol, Market integration

Abstract

Due to the importance of the sugar and alcohol market for the Brazilian economy and, above all, for the States of São Paulo and Pernambuco, the main objective of this research is to analyze how prices in the Pernambuco sugar and hydrated ethanol markets respond to shocks in sugar prices and of hydrated ethanol from São Paulo. The results obtained through the estimation of the Vector Autoregressive (VAR) methodology indicated that the prices of sugar and hydrated ethanol in the São Paulo market have a Granger causality relationship with the prices of sugar and hydrated ethanol in Pernambuco. The Variance Decomposition analysis confirmed this causal relationship and, therefore, price transmission, in the sense of prices in the sugar and alcohol market in São Paulo to prices in the sugar and alcohol market in Pernambuco. Finally, the Impulse-Response function showed that price shocks in the sugar and hydrated ethanol markets in São Paulo immediately cause, in the short term, a large change in the prices of sugar and hydrated ethanol in Pernambuco, considering a lag of maximum 12 months.

Author Biographies

Kennedy Jamestony de Carvalho e Souza, State University of Western Paraná

Economist. PhD student in the Postgraduate Program in Regional Development and Agribusiness at the State University of Western Paraná/Toledo Campus. Rua Guaíra, 3141, Jardim Santa Maria. Toledo, Paraná, Brazil. Zip code: 85903-000. jamestonykennedy@gmail.com

Pery Francisco Assis Shikida, State University of Western Paraná

Economist. PhD in Applied Economics from the Luiz de Queiroz College of Agriculture – University of São Paulo. Professor of the Postgraduate Program in Regional Development and Agribusiness and of the Economics course at the State University of Western Paraná/Toledo Campus. Rua Guaíra, 3141, Jardim Santa Maria. Toledo, Paraná, Brazil. Zip code: 85903-000. peryshikida@hotmail.com

Renata Cattelan, State University of Western Paraná

Economist. PhD in Regional Development and Agribusiness from the Postgraduate Program in Regional Development and Agribusiness at the State University of Western Paraná/Toledo Campus. Professor at the Center for Applied Social Sciences of the Paraná University/Francisco Beltrão Campus. Av. Júlio Assis Cavalheiro, 2000, Centro. Francisco Beltrão, Paraná, Brazil. Zip code: 85601-000. renata.cattelan@gmail.com

André de Souza Melo, Rural Federal University of Pernambuco

Economist. PhD in Applied Economics from the Federal University of Pernambuco. Professor of the Postgraduate Program in Administration and Rural Development at the Federal Rural University of Pernambuco. Rua Dom Manoel de Medeiros, S/N, UFRPE Campus, Block C, 1st floor, Dois Irmãos. Recife, Pernambuco, Brazil. Zip code: 52171-900. andredesouzam@gmail.com

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Published

2024-09-18

How to Cite

Souza, K. J. de C. e, Shikida, P. F. A., Cattelan, R., & Melo, A. de S. (2024). PRICE TRANSMISSION BETWEEN THE SUGAR AND ALCOHOLIC MARKETS IN SÃO PAULO AND PERNAMBUCO IN THE PERIOD FROM 2003 TO 2021. Revista Econômica Do Nordeste, 55(3), 136–153. https://doi.org/10.61673/ren.2024.1550

Issue

Vol. 55 No. 3 (2024)

Section

Artigos

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