Exchange Rates Impacts on dairy & poultry subsector Inputs Prices

Exchange rate is one of the important factors which affect the price of imported inputs like dairy & poultry subsector inputs prices. This study develops a system of empirical models that analysis the exchange rate and the LOP effects on dairy & poultry industry inputs prices (maze, soybeans, barley and fish powder). To achieve the aims of study, we used vector autoregressive (VAR) model in seemingly unrelated regression (SUR) framework over the period 1381:m1–1391m12. Dichey-Fuller unit root test suggested that all of the variables support the presence of unit root but the presence unit roots can be rejected in the first difference model. The results revealed that, in general, real exchange rate only affects the prices of soybeans and fish powder. A 1% depreciation of the domestic money raises the prices of soybean and fish powder by 8% and 23% respectively, at the same month. Also, results imply no exchange rate pass-through and invalidity of the LOP. According to the results, preventing from intensive increase in exchange rate and its volatility are very important steps on stability of dairy & poultry subsector input prices.