Basic grain imports and domestic prices in Honduras

Abstract

The importance of the analysis of the effect basic grains imports have on domestic prices derives from the incrementation that imports dependency grade has experience in Honduras since 1990. The objective of this paper is to determine the magnitude of the impact that an augmentation of basic grains imports in domestic prices in Honduras within the period 1966-2017. This research takes data for 51 years of production, imports and prices of beans, rice and corn collected from FAO, CEPALSTAT and AGRIMONITOR, and analyzes them using an almost ideal inverse demand model proposed by Eales and Unnevehr. The results of the investigation showed evidence of the increase in dependence on basic grains in Honduras to satisfy domestic demand and reflects a direct positive relationship between the explicit import differential and the basic grain price differential in Honduras during the period. period 1966-2017. Therefore, the study contributes to increasing the stock of knowledge on the subject by checking the applicability of a methodology to understand the dynamics of the relationship between imports and prices.