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Abstract
This article contributes to the empirical price transmission literature with a statistical investigation of market prices in the fish supply chain for Uganda. We are particularly interested in the extent of ex-vessel prices impacting links downstream in the fish supply chain. We test for vertical and horizontal co-integration for five important fish species using the Johansen vector error correction model. We search for price leadership using the Toda and Yamamoto procedure to test for Granger causality. And ARIMA models are used to forecast ex-vessel prices. Our results show that ex-vessel prices are only weakly related to downstream markets.
Notes
Asche et al. (Citation2014) provides an extensive list of the literature on commodity price transmission.
For example, see, Asche et al. (Citation2012); Asche et al. (Citation1999); Goodwin and Piggott (Citation2001); Alderman, (Citation1993); Gonzalez-Rivera and Helfand (Citation2010); Norman-Lopez (Citation2009); Dey et al. (Citation2014); Al-Marshudi & Katagama (Citation2006).
See, Maurice (Citation2011a) for a detailed overview of the Ugandan Fishery.
About 25,000 tons of fish are exported informally across land borders (Maurice, Citation2011a).
Financial losses from illegal fisheries have been estimated to be U.S. $30 million annually (UBoS, Citation2010).
Norman-Lopez and Asche (Citation2008) describe the price transmission and links for export oriented products, which are quite different from non-exported products (like Tilapia and Catfish examined here) as described in Norman-Lopez and Bjørndal (Citation2009).
MSY is estimated at about 300,000 tons with current exploitation rates around 350,000 tons. Of course, this does not account for illegal catches.
There are also indications that depleted stocks may be a potential source of regional conflict.
In Uganda it is illegal to export unprocessed fish (Dhatemwa, Citation2009).
Price data collected by Maurice (Citation2011a).
Asche et al. (Citation2012) and Asche, Menezes and Dias (Citation2007) provide other examples of seafood supply chains where it is a price in the middle of the supply chain that is exogenous.
See Asche et al. (Citation2012) for an alternative and efficient method of testing price leadership.
The real price variables have been log transformed.
See D. Giles for a clear discussion in application of the Toda-Yamamoto correction: http://davegiles.blogspot.com/2011/04/testing-for-granger-causality.html.
Autoregressive Integrated Moving Average Model.
For an excellent review of applied time series econometrics see, Enders (Citation2010).
For an interesting discussion of the first serious price forecasting model see, Gordon and Kerr (Citation1997).
The restriction on the exogenous variables requires that there be no feedback effect to the dependent variable (Enders, Citation2010).
Seasonal and trend variables were also included in specification but did not statistically improve the forecast.
Estimation is carried out using STATA 12 software.
Bayesian Information Criteria.
North Sea Herring is a good example of multi-country cooperation in fisheries management.
The Canadian Wheat Board is a good example of a single-selling desk improving the returns to Canadian farmers.