Price Transmission in Pakistan's Poultry Supply Chain

Increasing levels of concentration in the upstream sector of poultry supply chains have led to concerns about the influence of producers on farm-gate prices. Against this background, we employ threshold cointegration models to study price transmission mechanisms in Pakistan's poultry sector. We do not find evidence of asymmetric price transmission in the chicken supply chain, but evidence of asymmetric price transmission in the egg supply chain points towards the exercise of market power by egg producers. Differences in the short-run price transmission mechanisms of eggs and chicken can be traced to the underlying production and marketing activities, particularly degree of product storability.