AQUA 2012: Competition in Seafood Market has Increased Market Integration

By looking at trade data used to construct the FAO fish price index, Mr Tveteras analysed how prices have been affected by aquaculture growth and how competition has effected market integration.

Competition in the seafood market has been boosted over recent years through improvements in transport and logistics, commodification of products, advances in commodity life, an increased supply of seafood available and development of food retail chains.

Aquaculture has added to some of these advances as it can deliver good quality fish in response to the demand of the market. This can be seen by comparing fish price correlation data from the 1990's, when aquaculture was emerging, with data from the 2000's.

Data from 2000 - 2010 showed that globally, seafood imports and trade flows have increased.

The law of one price states that products that belong to the same market share a common market trend. However due to the complexities, Mr Tveteras calculated the degree of market integration by studying the price deviation from the mean price.

The results showed that increasing market integration can be seen among all species, except for crustacean (shrimp), which saw little change.

Mr Tveteras concluded that stronger market integration can be seen within species groups than between species. Capture fisheries also tend to show more integration than aquaculture.