CONTAMINATION EVENTS AND LINKAGES IN WORLD RICE MARKETS

AN ABSTRACT OF THE THESIS OF Mana-anya Iemsam-arng, for the Master\u27s degree in Agribusiness Economics, presented on November 9, 2010, at Southern Illinois University Carbondale. TITLE: Contamination Events and Linkages in World Rice Markets MAJOR PROFESSOR: Dr. Dwight Sanders In August of 2006, genetically modified LibertyLink rice contaminated the supply of non-GMO rice in the United States, causing damage to the U.S. rice production sector\u27s credibility in their export market. The damage to the United States\u27 credibility included doubt as to whether or not they had the ability to separate GMO and non-GMO rice strains during planting and/or production. This caused a short-term decline in the price of U.S. rice. The purpose of this paper is to examine rice price relationships from August 1997 to February 2010 among the four major rice exporting countries (Thailand, Vietnam, the United States, and India) before and after the genetically modified rice contamination event. Using unit root tests and cointegration tests, the results show that international rice export prices are independent from each other, yet the U.S., Thailand, and Vietnam 5 percent broken DWP rice prices tended to change in the same direction. The fact that the change in rice prices occurred right after the U.S. GMO contamination event of August 2006 is statistically significant. However, the results of this study cannot be proven to indicate that the contamination event\u27s impact caused this change in rice export prices. Keywords: Rice prices, Contamination Event