Currency Invoicing in Norwegian Salmon Export

Straume, Hans‐Martin

doi:10.1086/678930

Cited by 29 publications

(14 citation statements)

References 59 publications

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“…There is also substantial productivity growth associated with downstream activities, and this has led to vertical integration (Kvaløy & Tveterås, 2008;Olsson & Criddle, 2008;, use of contracts (Larsen & Asche, 2011) and focus on other aspects of the transaction mechanisms such as invoicing currency (Straume, 2014). Futures contracts provide an additional tool to hedge risk and reduce transaction costs.…”

Section: Introductionmentioning

confidence: 99%

The spot-forward relationship in the Atlantic salmon market

Asche

Misund

Øglend

2016

Aquaculture Economics & Management

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This study examines the Fish Pool salmon futures contract with respect to how well the market performs in terms of the futures price being an unbiased estimator of the spot price and whether the market provides a price discovery function. Using data for 2006-2014 and with futures prices with maturities up to 6 months we find that spot and lagged futures prices are cointegrated and that the futures price provides an unbiased estimate of the spot price. We also find that, with the exception of the front month, that the causality is one-directional. The spot prices lead futures prices between 1-6 months maturity. Hence, while the spot and lagged futures prices are unbiased estimates, we do not find support for the hypothesis that futures prices provide a price discovery function. Rather, it seems that innovations in the spot price influence futures prices. This finding is not uncommon in new and immature futures contracts markets. Hence, the salmon futures market is still immature and has not yet reached the stage where futures prices are able to predict future spot prices.

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Section: Introductionmentioning

confidence: 99%

The spot-forward relationship in the Atlantic salmon market

Asche

Misund

Øglend

2016

Aquaculture Economics & Management

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“…Price forecasting in the fish industry to manage price risk has been studied in a few articles (Vukina & Anderson, 1993;Gu & Anderson, 1995;Guttormsen, 1999), and more recent work consider forward trading for salmon (Oglend & Sikveland, 2008;Solibakke, 2012;Oglend, 2013;Asche, Oglend & Zhang, 2015). In addition, bilateral contracts and vertical integration has increased in the industry (Kvaløy & Tveteras, 2008;Olsson & Criddel, 2008;Larsen & Asche, 2011;Straume, 2014), and changed price transmission in some supply chains Dey et al, 2014). Thus, future contracts, long-term contracts and partnerships are increasingly used in order to reduce market risk.…”

Section: Introductionmentioning

confidence: 99%

Price Volatility in Seafood Markets: Farmed vs. Wild Fish

Asche

Dahl

Steen

2015

Aquaculture Economics & Management

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& Price volatility has an important impact on seafood markets and the aquaculture industry. This article investigates price volatility regimes along three dimensions; technology, species and product form. We identify regimes using the Iterated Cumulative Sum of Squares (ICSS), which allow us to compare the volatility found in aquaculture products, as well as comparing against fish-meal and soybeans. The results help identify the level of price risk found within the aquaculture industry across species and products. In addition, we differentiate between technologies comparing wild-caught fish with aquaculture products. The results also help us consider the relative riskiness of aquaculture compared to other industries. The results indicate that in aggregate, price volatility for aquacultured products is substantially lower than for wild. However, this varies substantially between species.

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“…Almost all Norwegian farmed salmon is exported (Marine Harvest, ); while consumers face retail prices in foreign currencies, producers' home currency is NOK. Bloznelis () found the EUR/NOK exchange rate to be an economically significant determinant of the spot price in 2007–2013 (see also Straume, ).…”

Section: The Salmon Marketmentioning

confidence: 99%

Short‐term salmon price forecasting

Bloznelis

2017

Journal of Forecasting

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This study establishes a benchmark for short‐term salmon price forecasting. The weekly spot price of Norwegian farmed Atlantic salmon is predicted 1–5 weeks ahead using data from 2007 to 2014. Sixteen alternative forecasting methods are considered, ranging from classical time series models to customized machine learning techniques to salmon futures prices. The best predictions are delivered by k‐nearest neighbors method for 1 week ahead; vector error correction model estimated using elastic net regularization for 2 and 3 weeks ahead; and futures prices for 4 and 5 weeks ahead. While the nominal gains in forecast accuracy over a naïve benchmark are small, the economic value of the forecasts is considerable. Using a simple trading strategy for timing the sales based on price forecasts could increase the net profit of a salmon farmer by around 7%.

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Currency Invoicing in Norwegian Salmon Export

Cited by 29 publications

References 59 publications

The spot-forward relationship in the Atlantic salmon market

The spot-forward relationship in the Atlantic salmon market

Price Volatility in Seafood Markets: Farmed vs. Wild Fish

Short‐term salmon price forecasting

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