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Price Analyses of the Brazilian Citrus Supply Chain



Author(s)

Adriana Ferreira Silva¹, Geraldo Sant’Ana de Camargo Barros² and Margarete Boteon³

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DOI:10.17265/2159-5828/2017.01.005

1. College of Administration, Economics and Accounting, Federal University of Goiás - UFG, Brazil
2. Department of Economics, Administration and Sociology, College of Agriculture, University of São Paulo (ESALQ/USP) and Scientific Coordinator at Center for Advanced Studies and Applied Economics (CEPEA/ESALQ/USP), Brazil
3. Department of Economics, Administration and Sociology, College of Agriculture, University of São Paulo (ESALQ/USP) and Researcher at Advanced Studies and Applied Economics (CEPEA/ESALQ/USP), Brazil

The Brazilian citrus chain is comprised by an upstream farm sector, made up of numerous heterogeneous (by size and technology) farm units serviced by input suppliers, and a downstream segment consisting of a small number of processing industries. Our study examines the behavior of citrus pricing along this supply chain, focusing on the relationship between orange juice prices established in international markets and orange fruit prices paid to Brazilian farmers. Results indicate that the price of orange fruit is fundamentally linked to the price of its juice, regardless of data source considered for testing. Evidence was found indicating that there is asymmetry of price transmission within the Brazilian orange sector, with juice price increases being transmitted to the farmer in smaller proportions than juice price decreases. The results of our study did not give a particularly strong indication of the cause of this price asymmetry.

Orange sector, Brazil, price transmission, asymmetry conditions.