Maltese dairy sector : price transmission analysis

Abstract

Milk is not only vastly nutritious but, being part of the dairy sector, also plays a dynamic role within the European agricultural sector. Malta, unlike other European countries, only has one dairy processing plant that purchases local milk which is pasteurised and transformed to meet consumer鈥檚 demand. This study sought to analyse the Maltese dairy sector鈥檚 overall price transmission between January 1996 and June 2022. This was further defined to analyse the effect of accession into the European Union (EU). A secondary aim sought to compare the price of raw milk with other European countries, and specifically with Cyprus as both countries are Mediterranean islands who joined the EU in May 2004 and face similar limitations due to their attachment from the mainland. This study used an Autoregressive Distributed Lag (ARDL) model and replicated Raposomanikis et al., (2003) method for which Popovics (2008) used to analyse Hungary鈥檚 dairy sector.