Analysis of the transmission of international orange juice prices to prices at the level of orange producer in the State of São Paulo

Abstract

In this study the price transmission elasticity between the frozen concentrated orange juice (FCOJ) industries and the price received by the orange farmers in the State of São Paulo, Brazil, was analyzed for the period July 1980 to June 1992. The main hypothesis is that the elasticity was less than one before 1986/1987, and equal to one from that crop on, due to the use of Participation Contracts between the industries and the farmers. According to these Contracts, the price payed by the Brazilian FCOJ industries to the orange farmer is expected to take into account the international orange juice price variations. That hypothesis was studied using autoregressive integrated moving average (ARIMA) and transfer function models.

JEL Classification : Q13; Q17.