Analysis of the spatial market integration of oilseed crop markets in Myanmar

This study was undertaken to distinguish the nature and extent of spatial integration of selected oilseed crops markets in Myanmar using the monthly price data from January 2002 to December 2007. The objectives of this study are to appraise the price transmission between oilseed crops markets by evaluating the degree of spatial market integration and to recommend policy interventions in order to correct and improve the whole oilseed crops sector in Myanmar. The Johansen's multivariate co-integration test was used to test for long run market integration. The results indicated that the markets in the producing area are highly integrated in the long run. Dynamics of short-run price responses were examined by using vector error correction model (VECM). By examining the short-run price adjustment, it was found that almost all of the markets deviated from long run equilibrium. Long run market performance was good for all markets, but there is disequilibrium condition in the short run market integration. The imperfection of market integration is attributed to weak diffusion of market information and asymmetric price transmission on market conditions. It can be concluded that if market infrastructure like transportation, communication facilities and market information are highly improved, the efficiency of market can be accelerated.