Management Theory and Studies for Rural Business and Infrastructure Development, Volume 22

The tendencies of grain price changes in Lithuania in 2006–2009

Vidmantas Bradūnas

Abstract

The past three years for grain growers were rather favourable: the grain harvest was increasing
by 10 percent every year and the grain self-sufficiency rate went up on average by 45
percentage points. The main reason, which caused the changes on the grain market, was the rapidly
growing supply.
During the period 2006–2009 the average grain purchase prices have decreased similarly
in Lithuania and other EU countries. During the analyzed period the grain prices were unstable –
they were constantly increasing from the second half year of 2006 to April of 2008 and later they
began decreasing. Although an almost perfect competition was dominating on the grain markets
in Lithuania and other EU countries – there were plenty of sellers and buyers and individual
seller or buyer didn‘t have any influence on the market prices and only the normal forces of demand
and supply should have caused the prices but the latter were not able to react to the price
changes and to influence them because both the demand and supply of the above-mentioned
products were inelastic. Furthermore, the grain prices had a decreasing tendency in comparison
with the prices of production material purchased by farmers because the demand for grain was
going up rather slowly and the supply was increasing considerably fast.

Keyword(s): grain, price, demand, supply


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Management Theory and Studies for Rural Business and Infrastructure Development eISSN 2345-0355

This journal is published under the terms of the Creative Commons Attribution-Noncommercial 3.0 Unported License. Responsible editor: Dr Audrius Gargasas.