Deliverable 2.4

From PrimeFish Wiki
Jump to: navigation, search

Report on “boom and bust” cycles for selected European fisheries and farmed species

Executive Summary

The seafood production and trade system is exposed to a variety of disruptions including fishery collapses, natural disasters, policy changes and price spikes. Especially the shocks caused by the latter are particularly negative for fisheries and aquaculture operations because they limit the ability to generalize or predict and, consequently, to adequatevely response to the market‘s shocks. The overall objective of PrimeFish is to enhance the economic sustainability of European fisheries and aquaculture sectors to inform operators and help them to identify potential risks and opportunities to build resilience in the global food system. As part of WP2 “Economic performance and prices” in PrimeFish, this deliverable is devoted to provide a detection of the component of time series of prices and an analysis of the occurrence for “boom and bust” cycles for the selected species studied in PrimeFish.

This study simply investigated patterns in the price – without trying to explain it beyond time components i.e. year - trends, seasonality – months and potentially other cyclical patterns.
The critical factors which are responsible for the principal prices‘ turbulences and drops and spikes in the prices of agricultural commodities in world markets has been explored through literature obtained from the principal databanks such as Web of Science for the last 10 years. Next, a similar literature review for price volatility of both fisheries and aquaculture markets has been realized. The sequence of price shocks presented in the metaanalysis is further empirically compared with the price series analyses executed using the method of Kalman‘s filters.

Comparing the B&B identified for our case studies and the literature review, after year 2009 the numbers of occurrence of B&B, as defined in the Report, increased meanwhile in international market volatility also increased, showing an increasing degree of commodities/products interconnection which leads to a rapid propagation of shocks. No recent manuscripts (e.g. peer-review papers, reports, etc.) have shown results about price volatility in the fish sector.

An example of how macroeconomic factors, such as household income, market prices, production volume, tariff and non-tariff barriers and exchange rates, can affect the occurrence and development of boom-and-bust cycles has been described in the case of Pangasius.

Price co-integration analysis has been carried out to implement the analysis of price transmission and market integration between species along their value chains. This is suggesting that the retailers are “cooling” the spikes in the first sale market and keep an average price at relatively constant level even if the first sale price is moving well above the average. In other words, retailers seem to alternate months of losses and gains. It is remarkable to observe that recent months are likely to have been economically negative for retailers, which have absorbed most of the spread difference in the prices.
In WP5, our efforts will be devoted to analyse more in depth the differences between aquaculture and fisheries case studies.

Download Full report