Market integration analysis in selected rice markets of Myanmar

This study analyzed the price integration for selected rice markets in Myanmar from April 2001 to May 2004. The purpose of this analysis was to understand market functioning for helping lawmakers further developing the rice market. In order to make a liberalization of the rice market there has to be certain specific market improvements in behaviors and relationships between central and local rice markets. The Autoregressive Distributed Lag model establishes existence of a long-run integration between pairs of markets. This indicates the influence of the Yangon Central Market price in the long-run to local markets. Error Correction Model results show the lack of short-run integration even though market segmentation does not exist. Insufficient transportation and communication facilities, lack of price transparency, and improper supporting services of middlemen cause inefficient price adjustment between the markets in the short-run. But, several markets show a significant time lag. The scope of improvement in market performance is ample. Privatization process in this market will face major challenges unless this situation is corrected.