PRICE DAMPING AND PRICE INSULATING EFFECTS OF WHEAT EXPORT RESTRICTIONS IN KAZAKHSTAN, RUSSIA, AND UKRAINE

This study analyzes the domestic price effects of export controls for all 3 KRU countries during the 2007/08 as well as the 2010/11 commodity price peaks. We develop two indicators to measure the strength of the export controls’ price damping and price insulating effect within a non-linear long-run price transmission model. Our analysis comprises 11 cases of export controls, distinguishing regional price effects within Russia. We observe heterogeneity in the damping and insulating effects of the export controls among the KRU and among the regions of Russia. Our model identifies the strongest domestic price effects during the export ban in North Caucasus (Russia), which were transmitted to Central, Black Earth and Volga regions by wheat flows from North Caucasus. For Ukraine the strongest price effects are observed during the export tax system 2011. The price effects identified for the 2006/7, 2007/8 and 2010/11 export quota systems are comparable to those observed for Central, Black Earth and Volga region. Contrary, our results do not identify any price effects of the export ban in Russia on Ural and West Siberia. We also do not find price decreasing effects during the export ban in Kazakhstan and the export tax system in Russia 2007/8. Concluding, the effectiveness of export controls in the KRU to dampen and decouple domestic wheat prices from world market price developments is generally rather limited