The project examines organization, market structure and distribution along the value chains in international food trade, focusing on Norway's seafood exports and agricultural exports and imports. To what extent is the export success for salmon due to skilled traders? Does the organization of trade vary across seafood products, and which mode is more efficient? Is the organization of trade different for large and small firms? These are among the questions raised in this inter-disciplinary research project carried out by NUPI, SNF/Bergen and Ruralis/Trondheim, with international partners in the USA, UK and India. While the organization of seafood exports is studied by NUPI and SNF, Ruralis has undertaken case studies of Norwegian exports of differentiated goods. Do the firms have what it takes to export, or is distribution limited to the local markets? NUPI and SNF analyse Norwegian imports of agricultural goods: How is import organization and market structure affected by tariffs and quotas? How do the ever more stringent rules for food safety affect the organization of trade; are small firms able to handle this? Norway is a small country with peripheral location: Imports of e.g. flowers occurs indirectly via the Netherlands or Germany. What role do intermediaries play in trade? Through case studies and analysis of trade data we will find out how Norway differs from other countries: Are flower imports into the UK, or agricultural imports into Switzerland, organized differently from Norway? Imports from Asia are doubled in value on the way to Norway; is this true also for other European countries? In cooperation with customs authorities, we track trade for selected goods, to develop new tools for control and analysis. A reference group with key seafood and agriculture firms also contributes in the project.
With the approval of the Research Council, the project period was extended until the end of 2019, because NUPI's postdoc project was delayed for health reasons. The project had good progress in 2017-18; four additional journal articles (total by now 13) have been published, on top of numerous academic and popular presentations. About ten more articles are on their way. The project's unique data set for Norwegian foreign trade at the transaction level combined with extensive information about the firms has provided a platform for a number of interesting research contributions. On the user side we had cooperation with the Norwegian customs authorities about the use of mirror data (where e.g. the exports from China to Norway are compared to the corresponding imports into Norway from China) in their control activity. During the final year of the project, broader dissemination will be an important focus, in addition to academic publishing. The final conference will be arranged in May 2019. An important task during the final period will be to obtain more active participation from the reference group.
In the following, we provide some key words about some work in the project: Frank Asche has jointly with American colleagues in two articles analysed how aquaculture has transformed global seafood markets. The growth in aquaculture globally has led to higher seafood consumption and stimulated larger scale, modern logistics and new approaches to marketing. Hege Medin has, using Norwegian trade data, shown that the large majority of exporters and importers use customs brokers for the clearing of their goods. Small firms rarely have the capacity to declare the goods by themselves. In another article published in the project, Medin shows theoretically and empirically that the share of firms that are exporters, tends to be larger in small countries.
Jostein Vik and Gunn-Turi Kvam have in two articles published during the last year analysed agriculture-based Norwegian exports, where producers often cooperate with traders in order to obtain market access. In their contributions, the authors analyse how export is organised and its potential.
In various contributions, Hans-Martin Straume, Frank Asche and Erling Vårdal have analysed seafood exports at the firm level, and whether changes in trade are driven by firm exit or entry, or changes in sales for firms that are already in the markets. One article shows that transport costs have a stronger impact on trade than what has been expected from earlier research. Another recently published article shows that in cod exports of, the trade relations between exporters and importers are of short duration, and this volatility is high for seafood exports.
The international participants have contributed new insight on food trade in developing countries: Flower trade in developing countries and the UK (Jodie Keane, ODI), the fisheries sector in India (Meenakshi Rajeev, ISEC), and the meat exports of Botswana/Namibia including trade with Norway (Ben Bennett, NRI/Univ. of Greenwich and Karl Rich, Lincoln University/CGIAR).
Asche, F., Cojocaru, A. L., Gaasland, I., & Straume, H. M. (2017). Cod stories: Trade dynamics and duration for Norwegian cod exports. Journal of Commodity Markets.
In recent years, trade dynamics have been receiving increased attention, and the general literature indicates that commodities are different. In this paper, the duration of trade relationships for Norwegian export firms to various markets is investigated for six product forms of one commodity, cod. The results indicate that the duration of most trade relationships is very short, and shorter than what is normally reported in the literature. Still, the substantial variation in duration by product form and factors influencing it, indicates heterogeneous dynamics for each supply chain even for slight differences in the characteristics of a commodity. Moreover, the short duration of trade relationships in the supply chains for Norwegian cod indicates that they remain very traditional food supply chains, with few attempts at reducing transaction costs through vertical coordination or relationships.
Anderson, J.L., Asche, F., T. Garlock (2018) Globalization and Commoditization: The Transformation of the Seafood Market. Forthcomming in Journal of Commodity Markets.
During the last three decades, international seafood markets have changed significantly, as most markets have gone from being regional or local to global. This process has been facilitated by improved logistics and conservation technologies, reduced transportation costs and low tariffs for seafood compared to most other food products. This article describes this process, and the commoditization that has created some large global market segments such as whitefish, salmon, shrimp and tunas. While these market segments are separate, within them there is a common price determination process where it is possible to create margins due to specific product attributes such as freshness or ecolabeled, but where it is very difficult to segment away from the common price determination process. The commoditization of seafood has created opportunities for competitive producers and contributed to making seafood one of the most traded food groups, but it is of course also creating challenges for domestic producers in importing countries as they face keener competition.
2) Revise and resubmit in progress:
Oglend, A. & Straume, H. M. (2018). Pricing Efficiency across Destination Markets for Norwegian Salmon Exports. Aquaculture Economics & Management
Straume, H. M., Anderson, J. L., Asche, F. & Gaasland, I. (2018). Delivering The Goods: The determinants of Norwegian Seafood Exports. Marine Resource Economics.
3) Articles in the publication process:
Hans-Martin Straume, Frank Asche and Erling Vårdal: Trade costs for highly perishable products: Norwegian salmon exports. Sent for publication in Applied Economics
Frank Asche, Ivar Gaasland, Hans-Martin Straume and Erling Vårdal: Norwegian export of farmed salmon −trade costs and market concentration. Sent for publication in Applied economic letters
Straume, H. M., Asche, F. & Vårdal, E. (2018). Trade Margins in Norwegian Seafood Exports. Aquaculture 2018, Las Vegas, 19-22.2-2018.
Gaasland, I. (2018): Impacts of Trade Costs on Norwegian Export of Farmed Salmon. Aquaculture 2018, Las Vegas, 19-22.2-2018.
Straume, H.M (2018). Networks in Norwegian Salmon Exports. 10th AD-HOC FAO Fish Price Index Workshop, Capri, 17-18.9.2018
Research Council of Norway