Price Analysis of Export Behavior of Aquaculture Producers in Honduras and Peru

Abstract

Many small-scale aquaculture producers in developing countries find it challenging to access international value chains due to barriers-to-entry. To shed light on this issue, this article presents three case studies where we analyze export behavior of aquaculture producers from Honduras and Peru based on price behavior in export markets (EU and USA) and in domestic wholesale markets. The price analysis suggests that in all three value chains that include shrimp, tilapia and trout there are competitive aquaculture producers that participate in international value chains and that are able to respond to profitable opportunities when relative prices change. While some small scale producers are able to enter international chains through larger exporters, the majority seem to serve domestic markets and often markets close to the production sites.

Keywords:

• aquaculture
• cointegration
• international trade
• price analysis

Notes

For completeness one should also mention that if the demand schedule in market 2 shifts downwards, the two goods are complements.

In most analysis it is assumed that transportation costs and quality differences can be treated as constant. However, this can certainly be challenged, see e.g., Goodwin, Grennes and Wohlgenant (1990), since if e.g., transportation costs are not constant, this can cause rejections of the Law of One Price.

One can also show that if β < 0, this implies a complementary relationship between the two goods.

Asche et al. (1999) is an example of this approach.

The critical values for these tests are non-standard, and are tabulated in Johansen and Juselius (1990).

Absolute differences in price level should be interpreted with some care as product format composition of frozen shrimp (e.g., head-on, head-off etc.) will account for some of differences in average prices. However, it is mainly the changes in relative prices that are of interest to this analysis.