Download or read book Macroeconomic Determinants of the Coffee Price Volatility in Ethiopia Application of the Garch Midas Model written by Tekle Bobo and published by GRIN Verlag. This book was released on 2020-10-20 with total page 94 pages. Available in PDF, EPUB and Kindle. Book excerpt: Master's Thesis from the year 2020 in the subject Economics - Statistics and Methods, grade: 24, Haramaya University, language: English, abstract: Application of GARCH type model is a key for modeling and forecasting volatility for high frequency data such as daily commodity price. Following the same framework, the objective of the present study is to apply the multiplicative GARCH-MIDAS model for daily exported coffee price as proxy of daily total coffee price of Ethiopia over the period of 1-1-2008 to 7-17-2018 with the purpose of fitting and forecasting coffee price returns volatility. The GARCH-MIDAS model decomposes the conditional variance as short-term component of GARCH (1,1) process, and long-term component, with monthly frequencies of macroeconomic variables. In this study exchange rate (nominal exchange rate), inflation rate (general inflation), interest rate (lending interest rate), fuel oil price (price of imported petroleum and petroleum production), total consumption and money supply (broad money) macroeconomic variables were employed through MIDAS specification using beta-weighting scheme to analyze impact of the variables on the long-term volatility component. For fitted ARMA (1,1) of coffee price return ARCH effect test on the residual from the mean model revealed the existence of time varying conditional variance for the selected mean model. A conditional variance model GARCH (1,1) was selected and used to model the conditional variance of coffee price return with Quasi Maximum Likelihood along with Bayesian estimation methods and both estimation procedures indicated the persistence of conditional variance observed even for small sample under Bayesian estimation framework. Asymmetry test show the insignificance of the asymmetric term, while Lundbergh and Terasvirta Lagrange Multiplier and the Li-Mak portmanteau test for the residual of GARCH model show the existence of time varying unconditional variance and made call for GARCH-MIDAS model. From the result of estimated GARCH-MIDAS model exchange rate and inflation rate were found to be the best drivers of coffee price volatility in Ethiopia and used for in and out of sample forecast. Finally, the Mean Absolute Error Root Mean Square Error and Diebold Mariano test were used for evaluating and comparing the forecasting ability of GARCH-MIDAS component model against standard GARCH (1,1) model which indicated that, including exchange rate and inflation rate make efficient forecasting of coffee price volatility in Ethiopia.
Download or read book Coffee Price Volatility in Ethiopia written by Firdu Gemech and published by . This book was released on 2005 with total page 23 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Exploring an Effective Coffee Price Volatility Management Mechanism in the Case of Ethiopia written by Jotework Gudeta Ayele and published by . This book was released on 2012 with total page 80 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Impact Of Covid 19 On Statistical Characteristics of Coffee Market Evidence From Ethiopian Coffee written by Tewodros Ayalew and published by GRIN Verlag. This book was released on 2020-12-10 with total page 65 pages. Available in PDF, EPUB and Kindle. Book excerpt: Research Paper (postgraduate) from the year 2020 in the subject Business economics - Investment and Finance, grade: 96 %, World Wide Education (WORLDQUANT UNIVERSITY), course: FINANCIAL ENGINEERING CAPSTONE PROJECT, language: English, abstract: Following the recent world crisis as a result of COVID-19 pandemic, the world has suffered tremendous losses in almost all market sectors that form the global economy. In this light, the researchers have decided to carry out a market research in one of the sectors of the global economy which is the commodity market. That market has a booming characteristic specifically the Ethiopian coffee export market. Therefore, it will be the project point of focus. The capstone project focuses on analysing 30 years of data and the current year before and after the COVID-19 pandemic, as well as during the period it has existed. The research used a couple of modern day tools to gather and analyse the data which has been collected from the Ethiopian Coffee Authorities. Tools such as Python and Excel have been used to develop a model for prediction and to test the hypothesis such as the ARIMA, Simple Linear Regression as well as the Paired T-test. Correlation and Covariance analyses have been carried out to test the relationship between the Ethiopian coffee market and the global economy participants such as the US and China to evaluate the degree of relationship and to find out whether the COVID-19 Pandemic has any effects on the coffee market in Ethiopia. The research result shows that the Ethiopian coffee export market will double its revenue for the coming 10 years. The project find out COVID-19 has a significant negative relationship with the coffee market but as compared with other countries disasters, the coffee export market in Ethiopia has been slightly impacted, there was still significant growth in the market during this period due to governmental policies put in place to protect the market from crashing or suffering from very heavy losses over time. It can be considered as a role model for other world countries in combating the pandemic to protect the market.
Download or read book Trade value chains and rent distribution with foreign exchange controls Coffee exports in Ethiopia written by Seneshaw Tamru and published by Intl Food Policy Res Inst. This book was released on 2019-09-18 with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt: Exchange rate policies can have important implications on incentives for export agriculture. However, their effects are often not well understood. We study the issue of foreign exchange controls and pricing in the value chain for Ethiopia’s coffee - its most important export crop. Relying on unique pricing and cost data, we find that coffee exporters are willing to incur losses during exporting by offering high prices for coffee locally in order to access scarce foreign exchange. The losses in export markets are then more than recovered in importing, indicating rents - import parity prices are significantly lower than the prices charged for imported goods, so that profits on imports are much higher than the losses incurred in exporting. We further show that the high coffee wholesale prices are transmitted to farmers, so that they benefit from the rents downstream. These results suggest that a better exchange rate alignment to reduce the overvaluation of the local currency in this case would have a lower impact on export crop producer prices than typically is anticipated.
Download or read book Volatile coffee prices Covid 19 and market fundamentals written by Hernandez, Manuel A. and published by Intl Food Policy Res Inst. This book was released on 2020-06-02 with total page 12 pages. Available in PDF, EPUB and Kindle. Book excerpt: Over the past three months, coffee prices have experienced multiple spikes and high volatility. This is in contrast to world market prices of major staple foods, which have remained relatively stable. While experts initially attributed the instability of coffee prices to supply-side uncertainty and market tightening, the covid-19 pandemic seems to have aggravated coffee’s price fluctuations. The novel coronavirus represents an unprecedented joint supply and demand shock to the global coffee sector, constituting an enormous challenge to coffee growers, farm workers, and downstream value chain actors. These various supply and demand impacts will be felt at different points in time further contributing to global market uncertainties and the ongoing price volatility. The pandemic may also have major implications for poverty and food insecurity for the world’s 25 million coffee producers, most of whom are smallholders in low- and middle income countries that are unprepared to respond to a public health crisis of this proportion.
Download or read book Structure and performance of Ethiopia s coffee export sector written by Minten, Bart and published by Intl Food Policy Res Inst. This book was released on 2014-06-20 with total page 33 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study the structure and performance of the coffee export sector in Ethiopia, Africas most important coffee producer, over the period 2003 to 2013. We find an evolving policy environment leading to structural changes in the export sector, including an elimination of vertical integration for most exporters. Ethiopias coffee export earn-ings improved dramatically over this period, i.e. a four-fold real increase. This has mostly been due to increases in international market prices. Quality improved only slightly over time, but the quantity exported increased by 50 percent, seemingly explained by increased domestic supplies as well as reduced local consumption. To further improve export performance, investments to increase the quantities produced and to improve quality are needed, including an increase in washing, certification, and traceability, as these characteristics are shown to be associ-ated with significant quality premiums in international markets.
Download or read book Institutions and Market Integration written by Manuel A. Hernandez and published by . This book was released on 2015 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: While the Ethiopian Commodity Exchange (ECX) is widely credited to be a successful on several accounts, there has been little rigorous empirical investigation. This paper attempts to fill that gap by analyzing how ECX has influenced the international-domestic price relationships of coffee -- the largest traded commodity on its floor. We examine three aspects of price dynamics -- market interdependence, volatility transmission, and structural breaks -- using a spatially disaggregated prices of five coffee varieties. The results indicate that contrary to popular media stories, ECX's success in improving coffee price relationships has been limited. The results appear to be robust under all three sets of analysis.
Download or read book The coffee production and marketing in Ethiopia An analysis of challenges and opportunities written by Abrham Gebreselassie and published by GRIN Verlag. This book was released on 2021-07-27 with total page 73 pages. Available in PDF, EPUB and Kindle. Book excerpt: Master's Thesis from the year 2014 in the subject Agrarian Studies, grade: 5 (Excellent), Szent István University (Institute of Regional Economics and Rural Development), course: Rural Development and Agribusiness, language: English, abstract: The general objective of this paper is to analyze the trends of coffee sector in Ethiopia in general. Furthermore it wants to generate baseline information on production and marketing systems of the selected study area in particular by concentrating on parameters like production, marketing, institutional and organizational support and challenges and opportunities. Currently, Ethiopia contributes 3.6 percent of the total value and 3 percent of the total quantity of coffee traded to the global market, which leads the country to be the 10th largest exporter of coffee in the world and the first exporter in Africa. 40% of the total coffee production of Ethiopia is exported, which earns 33% of the overall value of agricultural goods exported and 24% of the whole export value of the country. Over one-third of the population living in the rural areas and over 15 million populations sustain their livelihoods and participated in coffee production. There are around one million coffee growers in the country. Coffee has been an important commodity which has got greater attention by the government of Ethiopia. It is the first cash crop that the Ethiopia Commodity Exchange (ECX) started trading operations in April 2008 in order to advance coffee markets in the country. High costs and high risks of transaction were the features of agricultural markets in Ethiopia before 2008, with only one third of the production reaching the market. Besides, smallholder farmers have little information about the market which limits them to sell their final products at the nearby market, deal with good prices as well as minimizing their market risk. Coffee market incompetence chiefly affect the income of coffee farmers and discourage them in the process of coffee production and marketing which lead to a significantly decreases in the country’s foreign exchange. This suggests that it is very critical to study and monitor systematically the production and marketing systems in all coffee growing areas of the country for the sake of planning and designing suitable research and development interventions that are applicable to the specific systems.
Download or read book Marketing mix and strategy for Ethiopia s coffee marketing written by Dereje Tesfa and published by GRIN Verlag. This book was released on 2019-08-28 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: Seminar paper from the year 2019 in the subject Business economics - Trade and Distribution, grade: A, , language: English, abstract: Ethiopia is the single largest African producer of coffee with about half of its production going for export. It plays a central role in Ethiopia’s economy and as the country’s leading export is an important source of foreign exchange. The coffee bean export business reserved for Ethiopia citizens. Out of the total number of coffee exporting companies, 93 percent are private companies, 5% are coffee growing farmers' cooperatives, and 2 % are governmental enterprise. The extent to which cooperatives and private, including previous Ethiopian Grain Trade Enterprise (EGTE) now named Ethiopia Trading Business Corporation (የኢትዮጵያ የንግድ ሥራዎች ኮርፖሬሽን) and state farms, play a role in coffee exports from Ethiopia. Currently coffee generates less than 35 percent of the total export earnings. For the last several years its relative predominance in the export sector is decreasing because of increased contribution of other agricultural products like horticulture and floriculture. Consequently, only a little over 26% percent of the total export earnings is contributed by coffee during the year of 2011 (FDRE, 2011). This is the lowest share earned from export of coffee in the history of economy.
Download or read book Investing in wet mills and washed coffee in Ethiopia Benefits and constraints written by Tamru, Seneshaw and published by Intl Food Policy Res Inst. This book was released on 2018-08-09 with total page 25 pages. Available in PDF, EPUB and Kindle. Book excerpt: Local value-addition in developing countries is often aimed at the upgrading of agricultural value chains, since it is assumed that doing so will make farmers better off. However, transmission of the added value through the value chain and constraints to adoption of value-adding activities by farmers are not well understood. We look at this issue in the case of coffee in Ethiopia – the country’s most important export product – and value-addition in the coffee value-chain through ‘washing’ coffee, which is done in wet mills. Washed coffee is sold internationally with a significant premium compared to ‘natural’ coffee, and we find that this premium is largely transmitted to producers. However, while wet mills have become more widespread, the share of washed coffee in Ethiopia’s coffee exports is not increasing over time and, even if coffee farmers have access to a wet mill, they often do not sell all their coffee cherries to them. Relying on a unique primary large-scale dataset and a combination of qualitative and quantitative methods, we examine the reasons for this puzzle. The reasons seemingly are twofold. First, labor productivity in producing red cherries, which wet mills require, is lower than for natural coffee, reducing incentives for adoption, especially for those farmers with higher opportunity costs of labor. Second, only impatient, often smaller, farmers sell red cherries, as more patient farmers use the storable dried coffee cherries as a rewarding savings instrument, given the negative real deposit rates in formal savings institutions.
Download or read book The Production Marketing and Economic Impact of Coffee in Ethiopia written by Teketel Haile-Mariam and published by . This book was released on 1973 with total page 502 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Socioeconomic Shocks and Africa s Development Agenda written by Evans Osabuohien and published by Taylor & Francis. This book was released on 2022-11-10 with total page 333 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book investigates how African countries respond to socioeconomic shocks, drawing out lessons to help to inform future policy and development efforts. The challenges posed by the COVID-19 pandemic affected all sectors of the economy, exposing substantial structural weaknesses and complexities in supply chains and logistics across the African continent. This book examines the disruptive impact of the pandemic across Africa. However, it also goes beyond the current crisis to investigate how socioeconomic pressures in general impact commodity prices, national budgeting processes, food, business, energy sectors, education, health, and sanitation. Overall, the book presents evidence-based solutions and policy recommendations to enable readers to improve resilience and responses to future crises. The insights provided by this book will be of interest to policymakers and development agencies, as well as to researchers of global development, politics, economics, business, and African studies.
Download or read book Cash crops and food security written by Kuma, Tadesse and published by Intl Food Policy Res Inst. This book was released on 2016-09-27 with total page 22 pages. Available in PDF, EPUB and Kindle. Book excerpt: One of the key questions in food policy debates in the last decades has been the role of cash cropping for achieving food security in low income countries. We revisit this question in the context of smallholder coffee production in Ethiopia. Using unique data collected by the authors on about 1,600 coffee farmers in the country, we find that coffee income improves food security, even after controlling for total income and other factors and after addressing the endogeneity of coffee income. Further analysis suggests that the pathway for achieving this improved food security is linked to being better able to smooth consumption across agricultural seasons. In contrast with food crops, coffee sales take place almost throughout the whole year, providing farmers with cash income also during the lean season.
Download or read book Market Reforms and Commodity Price Volatility written by Benedicto Lukanima and published by . This book was released on 2014 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The goal of this paper is to examine the impact of commodity market reforms on producer price volatility using evidence from the East African coffee market. The results, based on time-varying volatility models and key summary statistics, show that coffee market reforms in the East African Community (EAC) are associated with changes in producer price volatility and volatility persistence at both country and regional levels. However, reforms were not the only cause of changes in price volatility. The study further shows that reforms had different effects on prices volatilities of Arabica and Robusta varieties of coffee grown in individual EAC countries. These findings have wider implication for commodity market reforms and producer price stabilisation policies in the EAC and coffee producing countries in sub-Sahara Africa.
Download or read book Food Price Volatility and Its Implications for Food Security and Policy written by Matthias Kalkuhl and published by Springer. This book was released on 2016-04-12 with total page 620 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book provides fresh insights into concepts, methods and new research findings on the causes of excessive food price volatility. It also discusses the implications for food security and policy responses to mitigate excessive volatility. The approaches applied by the contributors range from on-the-ground surveys, to panel econometrics and innovative high-frequency time series analysis as well as computational economics methods. It offers policy analysts and decision-makers guidance on dealing with extreme volatility.
Download or read book The Oxford Handbook of the Ethiopian Economy written by Fantu Cheru and published by Oxford University Press. This book was released on 2019-01-10 with total page 872 pages. Available in PDF, EPUB and Kindle. Book excerpt: From a war-torn and famine-plagued country at the beginning of the 1990s, Ethiopia is today emerging as one of the fastest-growing economies in Africa. Growth in Ethiopia has surpassed that of every other sub-Saharan country over the past decade and is forecast by the International Monetary Fund to exceed 8 percent over the next two years. The government has set its eyes on transforming the country into a middle-income country by 2025, and into a leading manufacturing hub in Africa. The Oxford Handbook of the Ethiopian Economy studies this country's unique model of development, where the state plays a central role, and where a successful industrialization drive has challenged the long-held erroneous assumption that industrial policy will never work in poor African countries. While much of the volume is focused on post-1991 economic development policy and strategy, the analysis is set against the background of the long history of Ethiopia, and more specifically on the Imperial period that ended in 1974, the socialist development experiment of the Derg regime between 1974 and 1991, and the policies and strategies of the current EPRDF government that assumed power in 1991. Including a range of contributions from both academic and professional standpoints, this volume is a key reference work on the economy of Ethiopia.
