Exchange rates and commodity prices: the case of Australian metal exports

Exporters of homogeneous commodities are usually regarded as 'price takers' who operate in perfectly competitive international markets? so that the pa ss-through of exchange rate changes to foreign-currency prices must be zero . However, many Australian commodities are subject to influences that may p roduce more complex pricing strategies, for example, markets in which Austr alia is a dominant exporter, or where there are few buyers and sellers due to the presence of large multi-national corporations. This study uses multi variate cointegration techniques to examine the pricing of Australian metal exports. with particular emphasis on the degree and timing of the pass-thr ough of exchange rate and other changes.