Spatial price transmission: A study of sheep markets in Sudan

Recent research in low-income countries has shown that high transfer costs and marketing marginsmay hinder the transmission of price signals, as they may prohibit arbitrage. Oligopolistic behaviorand collusion among domestic traders may retain price differences between markets at levels higherthan those determined by transfer costs and hinder the full price transmission and market integration(Rapsomanikis et al., 2003). This paper investigates price movements among important sheepmarkets in the Sudan to explore their performance and pricing efficiency. Six geographicallyseparated livestock wholesale markets are tested spatially, using Johansen’s cointegration test (1988)and time-series price data for the period 1990–2004. Spatial analysis of the whole dataset indicatesthe absence of cointegration among the selected markets, while a subset of the data, for the period2000–2004, after some infrastructural facilities were introduced, shows that the same markets arecointegrated.