Effect of Exchange Rate Uncertainty on Trade of Agricultural Products in Iran (Case Study: Pistachio, Dates, Raisins and Walnuts)

Exchange rate volatility is ambiguous and the one of the factors that effecting agricultural trade. Regarding to importance of free trade and economic monoculture crops, the purpose of this study was to investigate the effect of exchange rate uncertainty on the foreign trade of agricultural products for this purpose four crops (pistachio, dates, raisins and walnuts) were selected and required information were gathered for period 1980-2010. For this purpose, first for calculating the uncertainty of exchange rates, generalized auto regressive conditional dissonance variance model (GARCH) were used and then to estimate the relationship between exchange rate and export of agricultural products were used gravity model and panel data method. The results of study showed that the exchange rate uncertainty has a negative effect on the export of agricultural products and pistachios are affected by this uncertainty more than other products. Therefore, creating certainty in the currency markets can be developed important agricultural export products. Also, other results showed that income importing countries has a significant and positive impact on export volumes that should be noted the selection of target markets.