A HEDONIC ANALYSIS OF SUDAN AND UNITED STATES COTTON PRICES

This study investigates the effect of differences in staple lengths and grades on the price of cotton. Particular attention is given to the cottons of the United States and the Sudan. The hedonic technique is used to test the hypothesis of market integration across those qualities and the effects of government pricing policies on the pattern of premia and discounts. A third use is to measure the cost of quality deterioration in Sudanese cotton. The hedonic analysis for the Sudan shows that the market for different staple lengths is integrated, whereas it is not true for the different grades. Sudanese cotton quality has been deteriorating since the early 1970's. The analysis of the U.S. government loan pricing program reveals that the cotton market for staple length 32 is independent of the other markets throughout the 1962-1981 period. Prices of the remaining staple lengths demonstrate consistent premia for the 1962- 1971 period. After 1971, relative prices for the staple lengths demonstrate no consistency. The markets for different grades, on the other hand, are strongly integrated. The free market prices for 1973- 1981 suggest that markets for all the staple lengths and grades are integrated

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