Nelė Jurkėnaitė 1, Alina Syp 2 and Aldona Stalgienė 1
1 Lithuanian Centre for Social Sciences, Institute of Economics and Rural Development, Department of Sustainable Food Systems, 03220 Vilnius, Lithuania
2 Institute of Soil Science and Plant Cultivation – State Research Institute, Department of Bioeconomy and System Analysis, 24-100 Puławy, Poland
Jurkėnaitė, N., Syp, A. & Stalgienė, A. (2025). Potato price transmission in a small producing country: Does the neighbourhood of the main producing country matter? Bulg. J. Agric. Sci., 31(2), 254–260
This paper investigates price transmission on the potato market of a small producing country, namely Lithuania, and the influence of the neighbouring main producing country (Poland) on the price setting over the period of 2017–2023. The research framework includes the following coherent and interconnected steps that allow to investigate relationships between potato prices: unit root tests, the Toda-Yamamoto test, the Autoregressive Distributed Lag (ARDL) modelling and the Bounds test for the co-integration, the Error Correction Term (ECT) estimation applying the ARDL Error Correction Regression. The Toda-Yamamoto test demonstrates a bidirectional movement between producer and retail prices on the Lithuanian potato market, while, in Poland, the price setting moves from producer to retailer. Bounds tests confirm the presence of the long run relationships for vertical and horizontal potato price transmission of the small producing country. However, the ECT coefficient for the domestic supply chain is 1.63 times the ECT coefficient for horizontal potato price transmission. Results confirm that the main producing country influences the price setting of the investigated small producing country. Thus, individual case studies of member states are important to understand potato price setting mechanisms and the EU market functioning.