THE EFFECTS OF EXPORT PRICES ON THE DEMAND AND SUPPLY FOR FISH IN THE PHILIPPINES

ABSTRACT

This paper describes the effects of changes in export prices on Philippine fish demand, supply, prices and trade. The analysis uses a multi-commodity-model of the fisheries sector that is based on the AsiaFish model. The results indicate that higher export prices lead to higher output and exports for the fisheries sector. However, such changes also cause a decline in the domestic consumption of fish.

Keywords:

• fish trade
• supply & demand
• AsiaFish model

ACKNOWLEDGEMENTS

The authors would like to thank Madan Dey, Mahfuzuddin Ahmed, and Roehlano Briones of the WorldFish Center for their valuable comments in the preparation of the model. They are also grateful to two anonymous referees for their valuable comments on an earlier draft. The usual disclaimer applies.

Notes

Note: *The values are expressed in percent deviations from the baseline.

Note: *Baseline values for variables expressed in “quantities” are in million kilograms while those expressed in “prices” are in pesos per kilo.

Note: *Baseline values for variables expressed in “quantities” are in million kilograms while those expressed in “prices” are in pesos per kilo.

Note: *RPM represents is the relative price of imports. It is the ratio of the import price (pm) to the composite price (parm). On the other hand, RPX is the relative price of exports. It is the ratio of the export price (px) to the composite price (parx).

1. The need for explicit export demand and import supply equations is eliminated by the assumption that each country is a small open economy.

2. A detailed listing of the data sources is available from the authors upon request.

3. Owing to the special nature of Processed Fish, Shells and Others, the detailed balance sheets for these fish types are shown in Appendix 1.

4. The additional process of recomputing the parameters again recognizes the differences between the sample data used in estimation and the aggregate data used in the model.

5. For a discussion of the estimation procedure, see Garcia et al. (2004).

6. The papers consulted for this exercise are Kumar (2004), Delgado et al. (2003), Alam et al. (2002), Estrada & Bantilan (2001), Dey (2000), and Squires (1987).

7. See the models of Clarete & Warr (1991), Cororaton (2000), Horridge et al. (2002), Inocencio et al. (2001), Cororaton & Cuenca (2000), and Bautista (1997).

8. Recall that the output of a particular fish type depends on its own price, prices of other fish and socioeconomic factors.

9. In the case of Milkfish, the cross price effects strengthen or weaken the effect of the decline in fish expenditure vis-à-vis the decline in its consumer price. The strength of its influence is not discussed here because it does not appear to seriously alter the theme of the discussion. However, it does not rule out the possibility that the cross-price effects are the dominant factors in explaining the results for the other fish types.