Analyzing the Effective Factors on Wheat Prices in Iran Mercantile Exchange

The agricultural products’ market has always been faced with many structural problems such as marketing weakness، price fluctuations and inadequate infrastructure and transportation in Iran. A major cause of such structural problems has been referred to the traditional and inefficient structure of the agricultural products’ market. Hence، Iran Mercantile Exchange started its activity since 2007 in order to reduce deficiencies of agricultural products’ market with the goal of controlling the price volatility of exchanged goods. This study analyses and compares the price volatility of wheat in Iran Mercantile Exchange by the domestic traditional market with the Chicago Mercantile Exchange. Therefore، weekly prices of wheat from March 2010 to December 2011were used to analyze the interactions between the prices of wheat in traditional market، Iran Mercantile Exchange، Chicago Mercantile Exchange، the exchange rates and the crude oil prices. The results revealed that the fluctuations in wheat prices in Iran Mercantile Exchange was high، compared to the domestic traditional market. The wheat price shocks in the Iranian market as well as in the Chicago Mercantile Exchange and the crude oil prices transferred to the wheat prices in the Iran Mercantile Exchange.