Behaviour of price transmissions in vertically coordinated markets: The case of frozen black tiger shrimp (Penaeus monodon)*

Abstract

This study analyses the behaviour of the price transmission process for the leading cultured shrimp species, black tiger shrimp (Penaeus monodon), in both forward and backward directions between Thai and Indonesian shrimp packer markets and the Japan Tokyo wholesale market. The bivariate cointegration approach using the Engle‐Granger two‐stage estimation procedure is applied in this study. The results show that Tokyo wholesale prices appear to have stronger backward influences on the formation of overseas contract prices used by Japanese shrimp importers in the Thai and Indonesian shrimp packer markets. In addition, there is a tendency for the speed of price transmissions in the long term to increase with increasing size class (from 26 to 30–21–25 and 16–20 counts per pound) of black tiger shrimp, regardless of estimation specification in the direction of price transmissions and the shrimp country of origin.     

Are farmed European seabass (Dicentrarchus labrax) prices in European Union markets affected by Turkish exports of farmed European seabass?

Abstract

Often, increases in farmed seabass and seabream production surpluses from Turkey and Greece have been blamed to lead to price declines and aquaculture sector crises. In this study, we investigate whether Turkish exports of farmed European seabass affect prices of European Union (EU) farmed European seabass. This is done by examining the existence of market integration between the prices of Turkish exports of farmed European seabass into the EU and the prices of farmed European seabass commercialized in wholesale markets in Barcelona, Madrid and Paris. Market integration and competition studies in fisheries and aquaculture products have generally focused on analyzing substitutability between species and between wild and farmed conspecifics. Few studies have focused on analyzing market integration between different geographic areas. Market integration analyses between different geographic areas have proven useful in anti-dumping investigations. Results show the lack of market integration between EU imports of Turkish farmed European seabass and main EU wholesale markets; in other words, farmed European seabass prices in EU markets do not seem to be affected by export prices of Turkish farmed seabass.     

PRICE RELATIONSHIPS IN PHILIPPINE MILKFISH MARKETS: UNIVARIATE AND CAUSALITY ANALYSIS

ABSTRACT

Uncertainties and lack of information on milkfish product prices, along with production-related problems with inputs, generally constrain efficient resource use in milkfish grow-out operations. Milkfish growers complain of fluctuating product prices such that when output price is low, they refrain from investing in inputs and technologies recommended to boosts production. The industry wants to know the state and behavior of milkfish prices. ARIMA models showed instantaneous price relationships between monthly wholesale prices in Manila and the regional producing areas. The cross-correlations of the error terms of the ARIMA models showed that prices in Manila are related with Lucena, Dagupan, Iloilo, and Zamboanga prices, but not with Cebu. Seasonal price indexes are higher (> 1) from December to May and lower (< 1) from June to November. Milkfish grow-out operators may benefit from understanding these patterns of price movements.     

Structural changes and imperfect competition in the supply chain of Japanese fisheries product markets

This study analyzed the existence of imperfect competition, and the time period for which it existed in the supply chain of fisheries products in Japan from 1976 to 2009. An empirical analysis of the imperfect competition using a structural model robust to nonstationary time series revealed that sellers of horse mackerel, Japanese flying squid, and sardines in wholesale markets located in consumption areas had market power before 1993 in upstream markets. In downstream markets, retailers of horse mackerel and sardines had market power not only before 1993 but also after 1992, and retailers of Pacific saury and red seabream had market power before 1993. However, there were a number of periods when the detected imperfect competition was mostly less than that in upstream markets. The findings of this study are consistent with those of a previous study, which pointed out that sellers in wholesale markets lost negotiation power due to the emergence of large retailers, such as supermarkets, who buy directly from producers, trading companies, wholesalers at production sites, etc., especially after 1992. A comparison with another previous study indicates that market power and asymmetric price transmission are closely related.     

Testing for market power in the UK salmon retail sector

Abstract

This paper presents an investigation into the structure of the salmon retail market in the UK. Evidence of the potential for market power is analysed using non‐linear three‐stage least squares to estimate a dynamic error correction model (ECM) following Bresnahan (1982) and Lau (1982) theoretical approaches. Results indicate that the system is well represented by the model and that the market is competitive in both the short and long run. This is the first study using this approach for the UK fish market and our conclusions support findings from previous empirical analyses of the food retail market, albeit using a different methodology.     

Performance of shrimp futures markets as price discovery and hedging mechanisms

Abstract

Granger causality tests revealed leading indicators of shrimp futures prices, implying that futures prices do not reflect all available market information and potentially fail to be an exemplary price discovery mechanism. Trading simulations confirmed that the use of some leading indicators allowed profitable arbitrage in shrimp futures trading. Shrimp futures were deficient as a hedging tool, as well. Correlations between futures and wholesale cash prices were often low, and basis risk rivaled price risk. Lack of liquidity is a likely explanation for shrimp futures’ shortcomings as a hedging tool and price discovery mechanism.     

Price volatility dynamics in aquaculture fish markets

Abstract

In this paper, a time-varying student-t copula is used to capture information on price volatility dependence in the short-, medium-, and long-run horizon in the US market for frozen and fresh salmon, trout, tilapia and catfish. Using monthly data from July 1992 to March 2017, the volatility dynamics for these aquaculture species are assessed. The analysis allows indicating significant differences in the volatility relationships, depending on time-frequency. While short-run volatility has limited dependency, there is significant dependency in both the medium- and long-run, indicating that market integration is stronger in the long-run. The information is particularly important to buyers and producers utilizing the futures markets, as contracts are typically traded using a set of frequencies, and may help them manage and reduce price risk.     

Competition between farmed and wild fish: The French sea bass and sea bream markets

ABSTRACT

Aquaculture is contributing at an increasing rate to the world seafood supply. The interaction between fisheries and aquaculture is especially important for the seafood market where supply of wild and farmed fish can affect price dynamics. We examine market interactions in the French fresh sea bass and sea bream markets. We test for long-term price parity between farmed and wild products for these two species, applying a bivariate cointegration approach to market delineation. We also conduct the Law of One Price (LOP) test between price series. Our data base consists of monthly domestic price series for fish purchased by French households from 2007 to 2012. Our empirical results show that the fresh fish markets for whole wild and farmed sea bream are partially integrated, yet those for whole wild and farmed sea bass are not integrated. The substantially higher price for wild sea bass relative to farmed sea bass suggests that consumers may be more sensitive to seafood production processes when it comes to higher-value species.     

Economics of milkfish (Chanos chanos) production in Hawaii*

Abstract

Economic evaluations of commercial milkfish (Chanos chanos) growout systems were made based on current Hawaiian fishpond, pond and tank culture techniques in Hawaii. Based on the observed practices of milkfish culture as a secondary or tertiary crop, capital costs and several operating costs were pro‐rated to accurately depict current farm practices. For a target harvest weight of 0.80 lb, the study estimates the total production cost for milkfish production at $3.31/lb for the pond system, $3.81/lb for the tank system and $1.84/lb for the Hawaiian fishpond system. At a sale price of $3.00/lb and seed cost of $0.25/fingerling, only the Hawaiian fishpond system is profitable under a 20‐year project life. When considering variable costs alone, the production cost is $1.78/lb for the pond system, $2.33/lb for the tank system and $1.53 for the Hawaiian fishpond system, yielding returns on variable costs of 67%, 30% and 59% respectively. Analyses of profit sensitivity to sale price, production yield, labor, feed and stocking indicate that sale price, as expected, has the largest impact on profitability, followed by feed. The results of this study are consistent with the Hawaii farmers’ view of milkfish as a secondary specie to core production based upon current market conditions and input requirements.     

Diurnal feeding pattern and gut content of milkfish Chanos chanos (Forsskål, 1775) cultured semi‐intensively during the wet and dry season in brackish ponds in the Philippines

To improve feeding management and reduce feed cost in semi‐intensive grow‐out culture of milkfish (Chanos chanos, Forsskål 1775) in brackish ponds, the relative shares of natural food (NF) and supplemental feed (SF) ingested by the fish were microscopically quantified from their completely dissected digestive tracts sampled during 24‐h cycles in wet (June–September) and dry (December–April) seasons. Particles from rice husk, indigestible to milkfish, were used as internal markers to quantify supplemental feed. Significantly (P<0.05) more NF than SF (1.4±0.2 vs. 0.4±0.1 g kg^?0.8) and SF than NF (1.4±0.8 vs. 0.6±0.3 g kg^?0.8) were found during the first month of the wet and the first 3 months of the dry season respectively. Diurnal feeding patterns on SF were significantly higher at morning hours during the dry compared with the wet season. The feeding pattern of milkfish is likely to be affected by the different weather and pond conditions in both seasons. Developing a season‐specific pond fertilization management to enhance NF availability in semi‐intensive milkfish culture can help to improve the economical and ecological performance of milkfish culture.     

Salmon prices in France and the UK: Does origin or market place matter?

Abstract

There have been several attempts to distinguish farmed Atlantic salmon by origin using trademarks. Whether there exist different regional markets for salmon, and in particular whether the UK market is separate from the market in continental Europe, is also an issue that has received attention. To address these questions, we investigate the relationship between Norwegian and Scottish salmon both in France and the UK, and between Scottish salmon in France and the UK. The analysis is carried out by investigating how the development of prices is related using co‐integration tests.     

Pilot study on polyculture of juveniles spotted babylon, Babylonia areolata, with milkfish, Chanos chanos, to marketable sizes using large-scale operation of earthen ponds in Thailand

Growth, production and economic analysis was performed for the polyculture of juveniles spotted babylon, Babylonia areolata, and milkfish, Chanos chanos, to marketable sizes using a large‐scale production of earthen ponds in Thailand. The analysis was based on actual cost and production data from a pilot commercial‐scale farm. A total farm area of 0.8 ha was comprised of 0.3 ha grow‐out earthen ponds, a 0.4 ha seawater reservoir, and a 0.08 ha accommodation and office. Each pond was stocked with spotted babylon juveniles of 0.3 g initial body weight at a density of 200 snails m^?2, and they were harvested at a 7‐month period, at an average body weight of 4.6 g for a total yield per production cycle of spotted babylon and milkfish of 9875 and 6875 kg ha^?1 respectively. Based on farm data and harvest data used in this study, initial investment requirement was estimated to be $4837. The ownership cost and operating cost per production cycle were $2241 and $18 501 respectively. Total cost per production cycle was $20 742. The cost of producing spotted babylon marketable sizes in this grow‐out farm design was $6.56 kg^?1. The enterprise budgets based on the price of spotted babylon at a farm gate in 2003 of $9.00 kg^?1 results in gross return, net return, return to capital and management, and return on investment of $31 190, $10 448, $12 689 and 2.62 respectively. Milkfish was not calculated for any returns because they were less than marketable sizes.     

From Atlantic to Pacific: Price links in the US wild and farmed salmon market

Abstract

In 1990, the US International Trade Commission stated that Atlantic and Pacific salmon species did not share a substitute relationship in any of the product forms. This result is contrary to economic demand studies that show a substitute relationship for Atlantic and Pacific salmon species. Time‐series results reported in this paper are consistent with the earlier demand studies and show evidence of an equilibrium price system that includes Atlantic, chinook and coho salmon species for the US market. For these three salmon species a substitute relationship cannot be rejected. However, we observe only weak price links across the three different species in the different US regional markets.     

Nitrogen and phosphorus digestibility and excretion of different-sized groups of milkfish (Chanos chanos Forsskal) fed formulated and natural food-based diets

This study determined the digestibility of nitrogen and phosphorus, and the excretion rate of different‐sized groups of milkfish fed a commercial diet, a SEAFDEC formulated diet or lab‐lab (natural food‐based diet). Fish (31.2–263.0 g) were stocked in 12 units of 300‐L fibreglass tanks filled with aerated seawater. The postprandial total ammonia‐nitrogen (TAN) and phosphate (PO₄‐P) excretion of fish were estimated from changes in TAN and PO₄‐P concentrations in water for 24 h. Digestibility was determined from the nitrogen, phosphorus and Cr₂O₃ content of the diets, and pooled faeces after the fish had been fed diets marked with chromic oxide. TAN excretion rate (mg TAN kg^?1 fish day^?1) was significantly lowest (P < 0.05) in medium to very big fish fed the lab‐lab diet (60.8–124.4) and highest in small and medium fish fed the SEAFDEC diet (333.3–331.6) and small fish fed the commercial diet (280.1). Regardless of size, fish fed lab‐lab excreted (mg PO₄‐P kg^?1 fish day^?1) significantly lower PO₄‐P (36.2) but did not differ with fish fed the commercial diet (64.8). Excretion rates decreased exponentially as fish weight increased but positively increased with feed ration. Excretion pattern of milkfish revealed two peaks: the first peak occurred 6 h after feeding and the second peak at 18 h for TAN and 21 h for PO₄‐P, coinciding with the start of the daylight hours. TAN and PO₄‐P excretion accounted for 20.5–34.6% of total N consumed and 18.7–42.6% of P consumed respectively. Approximately 27.9–42.5% of N consumed and 47.2–58.5% of P consumed were lost as faeces. Total nutrient losses were lower using the lab‐lab diet (0.31 g N and 0.14 g P kg^?1 fish) compared with the formulated diets (0.47–0.48 g N and 0.17–0.19 g P kg^?1 fish); the losses decreased per kg of fish as fish size increased. Results suggest that the diet and size of fish influence wastage of N and P to the environment with greater losses in small fish and when artificial diets are used. Such measurements will provide valuable information for the preparation of N and P budgets for milkfish in grow‐out systems.     

WILLINGNESS TO PAY FOR HACCP ON SEAFOOD IN TAIWAN

ABSTRACT

This study develops a conceptual framework based on the random utility model in order to estimate a consumer's WTP for hypothetical safer seafood (HACCP) in Taiwan. Grouper, milkfish, and oyster were surveyed as the subjects. The average WTP for grouper, milkfish, and oyster with HACCP are about 53.15% (NT$45 per kg), 52% (NT$19 per kg), and 46% (NT$25 per kg) price increments, respectively, over the average price without HACCP (NT$84 per kg, $NT36 per kg, and $NT54 per kg). A high WTP value may imply a strong demand for health and good market potential for safer seafood in Taipei, Taiwan.     

An analysis of price formation in the Dutch mussel industry

This paper presents the findings of a study aimed at identifying the determinants of price formation in the mussel industry in the Netherlands. The Netherlands is one of the major producers of mussels in Europe and the largest exporter. As such it is expected to have an important influence on price formation in Europe. The investigation of price formation attempted to identify the most important determinants of price at the wholesale market level and to test any interactions between the Dutch market and other markets in Europe. Estimation was by means of an econometric demand analysis using monthly data from the single auction market at Yerseke. The Dutch market was found to be highly competitive, with price highly responsive to supply, quality and seasonality. This short-term price elasticity is paired with price-inelastic short-term supply. Therefore there is potential for shifting the demand curve without inducing a shift in supply. The implications of these results are discussed and suggestions for marketing put forward.     

A simulation application to improve the operational efficiency of the wholesale fish market in Taiwan

Abstract

This paper presents the applications of two simulation models developed for the Pu‐Shin wholesale fish market: the current operational model and the alternative operational model. This study analyses the possible influence on the wholesale fish system by manipulating the number of porters in the alternative operational model. Cost‐benefit analysis is conducted to compare the two models. The results suggest ways to improve the operational efficiency of the wholesale fish market in Taiwan.     

Price integration in the farmed and wild fish markets in Uganda

This paper looks at price integration in the aquaculture and wild-harvested African catfish market channels in Uganda. The issue of integration between the two market channels is important because African catfish has become an important traded species in Uganda with exports to regional markets rising even faster than production, yet limited research has been undertaken to understand price formation in the supply chain. The analysis draws on monthly price data from January 2006 to August 2013, and applies threshold autoregressive approaches to test for the existence of a long-run relationship and price asymmetry and to determine the time path needed for shocks to be transmitted from one market channel to the other. The results show that, over the studied period prices in both market channels are linked in the long-run, implying that farm-raised catfish forms part of the same market as wild-harvested catfish in the country. The findings have strong implications for aquaculture producers and artisanal fishers as they can serve as a basis for more efficient farm management and marketing decisions.     

Growth performances for monoculture and polyculture of hatchery‐reared juvenile spotted babylon,Babylonia areolata Link, 1807, in large‐scale earthen ponds

This study was conducted to determine the feasibility of growing out hatchery‐reared spotted babylon juvenile (Babylonia areolata) in earthen ponds. The growth, survival and water quality for monoculture of spotted babylon were compared with the two polyculture trials with sea bass (Lates calcarifer) or milkfish (Chanos chanos). This study provided good results for growth and survival of spotted babylon in earthen ponds. The mean body weight gain of snails held in the monoculture was 5.39±0.08 g, and 4.07±0.16 and 4.25±0.11 g for those held in the polyculture with sea bass or milkfish respectively. Food conversion ratios (FCR) were 2.69, 2.96 and 2.71 for snails held in the monoculture and polyculture with sea bass and milkfish, respectively, and the final survival rates were 84.94%, 74.30% and 81.20% respectively. There were no significant differences in each parameter of water quality among the treatments but significant differences among the culture period were present (P<0.05). Salinity and total alkalinity showed the greatest changes during the culture period for all treatments. Seawater temperature, pH, dissolved oxygen, nitrite–nitrogen and ammonia–nitrogen gradually changed over the culture period for all the treatments. The present study indicated the technical feasibility for monoculture and polyculture of B. areolata to marketable sizes in earthen ponds.     

Occurrence of Vibrio cholerae and Vibrio parahaemolyticus among milkfish farms in Zanzibar

ABSTRACT

Fishing is among the main economic activities of the people of Zanzibar. Few fish dealers are transforming this sector into mariculture. Among the farmed fish is milkfish. Diseases are among the limiting factors in the development of the mariculture industry. Among other zoonotic diseases, vibriosis is caused by bacteria from the genus Vibrio. This study aimed to establish the occurrence of Vibrio cholerae and Vibrio parahaemolyticus among milkfish farms in Zanzibar. A total of 380 milkfish were sampled. Swabs were collected from gills, intestine, and kidney of each sampled milkfish. Preliminary identification of V. cholerae and V. parahaemolyticus was done by biochemical tests. PCR was run on 16S rRNA, outer membrane protein W, and collagenase genes to confirm Vibrio species, V. cholerae, and V. parahaemolyticus respectively. Almost one-third (32.1%) of all sampled milkfish were found to contain targeted Vibrio; 18% and 29.5% of the sampled milkfish were positive for V. cholerae and V. parahaemolyticus respectively.