Asymmetric price transmission in a changing food supply chain

Abstract

The farmed salmon supply chain in Europe is changing. There is a growing concentration at intermediary levels in the supply chain and more product differentiation in the market. This means that different price determination processes could apply in various product sub-markets. In this study, price transmission relationships in the salmon value chain were investigated at two different product levels. Specifically, a relatively unprocessed salmon product (fresh salmon) and a more processed product (smoked salmon) were investigated since processing costs might have a significant impact on a vertical price linkage. A threshold cointegration model was applied to estimate the price transmission between the Norwegian export market and the retail markets of France and Spain. The results indicated a price transmission relationship along the fresh salmon chain in both markets; but not along the smoked salmon chains in either market. Furthermore, for the fresh salmon value chain, asymmetric adjustment was observed in both markets.

Pulse, export and staple convenience food: market analysis in West Africa

“…Recent literature has taken interest in the value-added chain of agri-food commodities, examining the transmission of prices on the vertical chain (e.g., Gizaw et al, 2021). Important questions that could be asked include (a) what happens to the transmission of prices in the long run when a product is transformed in form?…”

“…Examining the asymmetric price transmission process is hence important to further detail the price mechanism for rising and falling prices. Gizaw et al (2021) have examined the fresh and smoked salmon value chain.…”

Asymmetry and transmission of international price shocks of cocoa and coffee in Togo

“…These questions are not new to the literature of asymmetric transmission of agricultural commodity prices. They have been discussed extensively in the asymmetric price transmission (APT) literature over the last five years (Jacomini & Burnquist 2018;Meyer et al 2018;Rudinskaya 2019;Abunyuwah 2020;Fitria et al 2020;Lanie 2020;Gizaw et al 2021;Hillen 2021;Ramsey et al 2021Antonioli & Santeramo 2022.…”

Price relationships along the Norwegian salmon value chains: A comparative study of the leading consumption market in France and the largest processing industry in Poland

“…The general finding from this literature is that the export prices of Norwegian salmon play the leading role in the determination of prices for the European downstream markets, but not vice versa (e.g., Asche et al, 2014;Gizaw et al, 2021;Landazuri-Tveteraas et al, 2018). Analyzing price relationships for 17 salmon products at the retail levels in France and the United Kingdom from 2005 to 2014, Landazuri-Tveteraas et al (2018) find that Norwegian export market prices influence the prices of salmon products in only half of retail markets, although this price transmission is found to be incomplete, except for the price of fresh salmon fillets in the United Kingdom, which is completely influenced by the export price.…”

“…Another strand of the literature explores asymmetries in the speed of price responses depending on the size of price margins along the supply chain. Ankamah-Yeboah et al (2017), Gizaw et al (2021), andSimioni et al (2013) identify asymmetries in the speed of price transmission along the salmon supply chains in France and Germany. In contrast to the previous literature, Larsen and Kinnucan (2009) is the only study exploring price relationships exclusively between the export and wholesale prices, finding that, with an average of 60%, the change in the export price is incompletely transmitted to the wholesale price of the whole salmon in France.…”