Pricing efficiency across destination markets for Norwegian salmon exports

Abstract

This paper investigates how pricing efficiency of Norwegian salmon exports varies across destination market characteristics. Efficiency is defined as the rate at which individual transaction prices adjust to common market information, and is estimated by dynamic fixed effects panel models with parameters conditional on trade attributes using micro-level trade data. Our results show that contract type (Incoterms) used in transactions can be used to segment the Norwegian export markets into three types: 1) high value trade to large distant markets, 2) medium value trade to close high-income markets, and 3) lower value large bulk trades to lower income close markets. We find that pricing efficiency is lowest for committed trades over long distance using planes, and highest for less committed large bulk trades to close markets. Despite significant heterogeneity, the majority of salmon price variation (around ¾) is common, providing a clear justification for the representativeness of a salmon price index.

Perish or prosper: Trade patterns for highly perishable seafood products

“…Salmon provides a number of examples of innovations in the supply chain organization and sales mechanisms improving logistics and facilitating trade. These include coordination (Gaasland et al, 2020;Kvaløy & Tveterås, 2008;Olson & Criddle, 2008), contracts (Larsen & Asche, 2011;Oglend & Straume, 2019;, futures trading (Asche et al, 2016;Oglend, 2013), invoicing (Straume, 2014) and trade duration Straume, 2017;Wang et al, 2019;Yang et al, 2021). These innovations have helped creating a global market as the two largest salmon-producing countries, Norway and Chile, export salmon to more than 150 countries.…”

Futures market hedging efficiency in a new futures exchange: Effects of trade partner diversification

“…However, it contains information on incoterm use (incoterms are rules defining buyer/seller responsibilities in sales contracts). Salmon transactions use different incoterms for different destination markets (Oglend & Straume, ). As such, incoterm provides a convenient variable to segment transaction types.…”

Challenges and opportunities: impacts of COVID-19 on Norwegian seafood exports

“…Norway has a diverse seafood sector with a significant aquaculture industry, groundfish and pelagic fisheries (Cojocaru et al, 2019;Asche et al, 2020) and trade a wide variety of product forms to a large number of countries (Straume et al, 2020a;Cojocaru et al, 2021). The export sector consists of a large number of export companies with different degrees of product and market specialization, where some products are highly dependent on a few companies and markets, while others are well diversified and potentially much more flexible in responding to market shocks (Oglend and Straume, 2019;Straume et al, 2020b;Asche et al, 2021;Oglend et al, 2022). Seafood is a highly traded food group with as much as 78% of the global production exposed to trade competition (Tveteras et al, 2012).…”