Transcript Fish Price Index: status of work, further development

FAO Price Index Workshop, Procida, Italy 4.10.11
Frank Asche, Kristin Lien and Sigbjorn Tveteras
UN Food and Agricultural Organization (FAO),
University of Stavanger (UiS), Pontifica Universidad Católca del Perú
and the Norwegian Seafood Export Council (NSEC)
The fact that the fish price index
can be disaggregated along several
dimensions makes it is possible to
pursue many relevant research
issues
 In the following we present some of the opportunities
that exist for research using the FPI
Research Issues based on FPI
1.
Are global seafood markets integrated?
2. Economic Growth and Seafood Prices
3. Feed Cost and Price of Aquaculture Fish
4. Fuel Cost and Price of Capture Fish
1. Integrated global seafood
markets – myth or reality?
The global whitefish market
appears to be integrated,
although imperfectly
For example, Alaska Pollock prices seem to
diverge from other white fish species, at least
during periods
Whitefish prices
180
160
140
120
100
80
60
40
20
0
AFRICA
ASIA
EUROPE
NORTH AMERICA
OCEANIA
SOUTH AMERICA
Price:
whitefish, whole frozen
200
180
160
140
Africa
120
Asia
100
Europe
80
North America
60
Oceania
40
South America
20
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
0
Price:
whitefish, whole frozen
160
140
120
Africa
100
Asia
80
Europe
North America
60
Oceania
40
South America
20
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
0
Price:
whitefish, fillet frozen
200
180
160
140
120
100
Africa
Asia
Europe
80
North America
60
Oceania
40
South America
20
0
Price:
whitefish, fillet frozen
Fall in Alaska
Pollock prices?
200
180
160
140
120
100
Africa
Asia
Europe
80
North America
60
Oceania
40
South America
20
0
• Origin North
America
• Markets EU,
Japan and USA
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
• Whitefish, fillet
frozen
120000
100000
80000
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
9
8
EU
7
USA
Price
6
5
4
3
2
1
0
Volume
North America - EU
North America - USA
60000
40000
20000
0
• Origin North
America
• Markets EU,
Japan and USA
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
• Whitefish, fillet
frozen
120000
100000
80000
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
9
8
EU
7
USA
Price
6
5
4
3
2
1
0
Volume
North America - EU
North America - USA
60000
40000
20000
0
Price:
whitefish, fillet frozen
180
160
140
120
100
80
Africa
Asia
Europe
60
40
20
0
South America
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
USD per kilo
Price:
whitefish, surimi
6
5
4
3
Asia
North America
South America
2
1
0
Pelagic fish prices are characterized
by high volatility. Some of these
markets appears to follow common
trends, but can periodically
experience strong deviations
Pelagic fish (excl. Tuna) prices
450
400
350
300
250
200
150
100
50
0
AFRICA
ASIA
EUROPE
NORTH AMERICA
OCEANIA
SOUTH AMERICA
Pelagic fish (excl. Tuna) prices,
smoothed
200
180
160
140
AFRICA
120
ASIA
100
EUROPE
80
NORTH AMERICA
60
OCEANIA
40
SOUTH AMERICA
20
0
140
120
100
80
origin Europe and
North America
60
40
EUROPE
20
NORTH AMERICA
0
600000
500000
400000
300000
200000
100000
0
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
 Small pelagic prices,
Europe-EU
Europe-Japan
Europe-USA
NorthAmerica-EU
NorthAmerica-Japan
NorthAmerica-USA
140
120
80
 Small pelagic prices,
origin Europe and
North America
60
Divergence
100
40
EUROPE
20
NORTH AMERICA
0
divergence
600000
500000
400000
300000
200000
100000
0
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
 There signs of
Europe-EU
Europe-Japan
Europe-USA
NorthAmerica-EU
NorthAmerica-Japan
NorthAmerica-USA
140
120
 Small pelagic prices,
origin Europe and
North America
60
Convergence
80
Divergence
100
40
EUROPE
20
NORTH AMERICA
0
 There signs of
divergence
600000
500000
400000
300000
200000
100000
0
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
 Then convergence
Europe-EU
Europe-Japan
Europe-USA
NorthAmerica-EU
NorthAmerica-Japan
NorthAmerica-USA
140
120
 Small pelagic prices,
origin Europe and
North America
60
Convergence
80
Divergence
100
40
Integration
EUROPE
20
NORTH AMERICA
0
 There signs of
divergence
600000
500000
400000
 Then convergence
300000
200000
100000
integration
0
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
 And finally,
Europe-EU
Europe-Japan
Europe-USA
NorthAmerica-EU
NorthAmerica-Japan
NorthAmerica-USA
3
Europe-EU
Europe-Japan
2.5
NorthAmerica-EU
1.5
1
0.5
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
0
1991
disaggragate level
show that the
divergence originated
from North American
pelagic exports to
Japan (light blue line)
NorthAmerica-USA
1990
 Prices at a more
NorthAmerica-Japan
2
600000
500000
400000
exports also command
a higher price in the
Japanese market (dark
red line)
300000
200000
100000
0
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
 European pelagic
Europe-EU
Europe-Japan
Europe-USA
NorthAmerica-EU
NorthAmerica-Japan
NorthAmerica-USA
The global tuna market exhibit
pronounced common trends in
price movements, but still not
perfectly integrated
Tuna prices
300
250
200
AFRICA
ASIA
150
EUROPE
NORTH AMERICA
100
50
0
OCEANIA
SOUTH AMERICA
Tuna prices, smoothed
200
180
160
140
AFRICA
120
ASIA
100
EUROPE
80
NORTH AMERICA
60
OCEANIA
40
SOUTH AMERICA
20
0
Tuna prices, smoothed
200
180
160
140
AFRICA
120
ASIA
100
EUROPE
80
NORTH AMERICA
60
OCEANIA
40
20
0
Difference in steepness of trend can
most likely be related to composition
of tuna species/product format
SOUTH AMERICA
Prices of other fish, which
represents a hodgepodge of
different kinds of species, are
surprisingly convergent at the
regional aggregate level
Could it be the effect of farmed fish such as
catfish, tilapia and pangasius that influence
these comovements?
Other fish prices
180
160
140
120
100
80
60
40
20
0
AFRICA
ASIA
EUROPE
NORTH AMERICA
OCEANIA
SOUTH AMERICA
Other fish prices
140
120
100
80
AFRICA
ASIA
EUROPE
60
40
NORTH AMERICA
OCEANIA
SOUTH AMERICA
20
0
Salmon prices have converged
with the growth of aquaculture
and has become a strongly
integrated global market
Salmon prices
200
ASIA
EUROPE
180
NORTH AMERICA
OCEANIA
160
SOUTH AMERICA
140
120
100
80
60
40
20
0
Shrimp is segmented in two types
of markets: 1) aquaculture and
2) capture, where the latter group
is more heterogenous
However, wild shrimp prices have not been
able to rise like many other fish species, which
is most likely due to the growth of shrimp
aquaculture
Shrimp prices
180
160
140
120
100
ASIA
80
SOUTH AMERICA
60
40
20
0
Farmed shrimp prices
relatively stable and integrated
Shrimp prices
200
180
160
140
120
AFRICA
100
EUROPE
80
NORTH AMERICA
60
OCEANIA
40
20
0
Wild shrimp prices more volatile due to
seasonality and more divergent because of
heterogenous species types
Shrimp prices
200
180
160
140
AFRICA
120
ASIA
100
EUROPE
80
NORTH AMERICA
60
OCEANIA
40
20
0
However, only weak if any increasing
trend in wild-shrimp prices
SOUTH AMERICA
Shrimp prices, smoothed
160
140
120
100
80
60
40
20
0
AFRICA
ASIA
EUROPE
NORTH AMERICA
OCEANIA
SOUTH AMERICA
Shrimp prices, smoothed
160
140
120
100
80
60
40
20
0
AFRICA
ASIA
EUROPE
NORTH AMERICA
OCEANIA
SOUTH AMERICA
Only weakly
increasing trends
suggest scarcity
is not an issue
Finally we compare price
development across species
200
180
160
Fish Species Price Indexes
(100=2005)
Data Source: NSEC
140
120
100
80
60
40
20
0
Other fish
White fish
Salmon
Shrimp
Pelagic e/tuna
Tuna
Summary
 Most markets for particular fish species groups appear
to be integrated across regions although the level of
integration appears to be related to
1. Heterogeneity of species within species group
2. Production technology
 Integration across species group is less, but there is
still signs of similar long-term trends when the long
run is defined to be 5-10 years intervalls
2. Economic growth and
seafood prices
EU, Japan and USA have similar
price development for seafood…
200
180
160
140
120
100
USA
EU
80
60
40
20
0
Japan
…and China too, but a bit steeper
200
180
160
140
120
USA
100
80
60
40
20
0
EU
Japan
China
…and Korea too, but even steeper
200
180
160
140
120
USA
100
EU
Japan
80
60
40
20
0
China
Korea
…and finally Brazil with steepest price
development
200
180
160
140
120
USA
EU
100
Japan
80
China
60
40
20
0
Korea
Brazil
Why is pricing rising faster in
emerging economies?
 The rise of the middle class in Asia seems to have two
effects
1. Increase in consumption of seafood
2. Changing the composition of seafood consumption
towards more high-value products
 This results in a higher inflation for seafood products
in emerging markets
3. Feed Cost and Price of
Aquaculture Fish
• Prices of aquaculture feed inputs have spiked
during the last years and should affect prices of
farmed fish
Aquaculture feed prices
350
300
Maize
250
Sorghum
200
Wheat
Fishmeal
150
Soybean meal
100
Fish oil
Rape oil
50
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
0
Prices of feed inputs and
aquaculture products
350
300
Maize
250
Sorghum
Wheat
200
Fishmeal
150
Soybean meal
Fish oil
100
Rape oil
50
Aquaculture
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
0
Conclusion
 The increase in prices of a broad range of important
inputs for aquaculture feed have led to rising prices for
aquaculture products
 This reflects the importance of feed cost of total
operational costs, and that that there are limited
oppurtinities to substitute away from rising input
prices
4. Fuel Cost and Price of
Capture Fish
One of the main cost components in capture
fisheries is fuel prices. The impact fuel prices have
on fish prices is not alltogether obvious
Capture fish and gasoline prices
180
Other fish
White fish
160
Pelagic e/tuna
Tuna
140
Crude Oil
140
120
100
120
100
80
80
60
60
40
40
20
20
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
0
1990
0
Conclusions
 The seafood market is highly global, and is becoming
increasingly so due to trade growth
 Market integration within species groups and across
exporting regions appears to be high
 We have to be careful about composition effects when
intepreting price trends
 Emerging market growth leads to increased seafood
imports and changes in the import composition
towards higher value products
Conclusions
 Prices are determined globally
 For an increasing number of species, production cost in
aquaculture determines price
 We don’t understand yet the influence of fuel prices on
capture fish prices

In fisheries where there are overcapacity increasing fuel prices
can reduce the size of the fleet and thereby increase
sustainability – but what about prices?
 FPI opens up for relevant research questions about
price formation in international seafood markets