Abstract

ACOSTA MARTINEZ, Ana Isabel; AVENDANO RUIZ, Belem Dolores  and  ASTORGA CEJA, Juana. Terminal market price relationships of fruits and vegetables from Mexico and US. Rev. Mex. Cienc. Agríc [online]. 2015, vol.6, n.7, pp.1429-1442. ISSN 2007-0934.

The degree of integration of the prices in avocado, onion, strawberry, cucumber, pepper and tomato are reviewed, quoted in major supply centers in Mexico and the US, from 1998 to 2008; from the idea that the intensity and trade complementarity between the two countries lead to market integration. The concept of agricultural market integration has been identified with the fulfillment of the law of one price (LPU) and the verification of this law implies that markets are integrated in space and time, that prices are determined instantaneously. The method used to measure it, consisted in identifying the order of integration of the price series by unit root tests and the estimation of vector autoregressive (VAR), then, paired Granger causality is examined, the breakdown of variance and network analysis to identify market leadership. With the results of the above tests, cointegration and exogeneity tests from the variable (prices) and the verification of LPU are estimated. The results indicate that the integration level is partial, observing a greater degree in US markets than in Mexico in products such as onions (50%) and strawberry (58%); in avocado integration is higher in Mexico (60%), while prices of tomatoes are integrated in a bi-national level with 58%.

Keywords : law of one price; market integration; seasonality of prices.

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