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THE FAO FISH AND SEAFOOD MODEL

THE FAO FISH AND SEAFOOD MODEL. Pierre Charlebois 5 th ad-hoc fish price index workshop Ischia, Italy, 3 rd & 4 th October 2013. CONTEXT. Rising food security concerns Growing demand for higher value food including fish by many developing countries

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THE FAO FISH AND SEAFOOD MODEL

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  1. THE FAO FISH AND SEAFOOD MODEL Pierre Charlebois 5th ad-hoc fish price index workshop Ischia, Italy, 3rd & 4th October 2013

  2. CONTEXT • Rising food security concerns • Growing demand for higher value food including fish by many developing countries • OECD/FAO agricultural outlook team suggested the addition of fish • Adopting the AGLINK/COSIMO structure and level of aggregation

  3. AGLINK/COSIMO • Dynamic, policy specific, non-spatial partial equilibrium model of key international agricultural markets shared by many organisations • 56 country/region components • PC-TROLL software • Producing outlook and policy and market analyses

  4. HISTORY OF THE FISH MODEL • Built in the fall of 2009 and winter of 2010 as a satellite model to AGLINK/COSIMO • Integrated in the OECD/FAO outlook system in 2011 and published with fish for the 1st time • Improved aquaculture supply elasticities incorporated in 2012 • Two other fish outlook in 2012 and 2013 • Complete revision of the demand elasticities and of the fish meal demand function in 2013

  5. THE FISH MODEL • 1111 equations • 45 country/regionendogenous modules • 3 products: fish, fishmeal and fishoil • 2 supplyfunctions for capture and aquaculture • Only one aggregatefishdemand but for 3 different types of uses: - Food - Processedintofishmeal and oil - Other uses

  6. SUPPLY • CAPTURE BEING CONTROLLED IS KEPT EXOGENOUS FOR MOST COUTRIES • ENDOGENOUS BUT NO PRICE RESPONSE FOR COUNTRY AFFECTED BY EL NINO • ONLY 12% OF WORLD CAPTURE RESPONDS TO PRICE • 99% OF WORLD AQUACULTURE IS ENDOGENOUS AND RESPONSIVE TO PRICE OF OUTPUT AND FEED USING RATION SPECIFIC TO SPECIES • THE PRODUCTION LAG, THE AMOUNT AND TYPE OF FEED OF THE MAIN AQUACULTURE SPECIES ARE CAPTURED • FISH MEAL AND OIL SUPPLY MODELLED LIKE OILSEED OIL AND MEAL • 97% OF WORLD REDUCTION (CRUSH) IS ENDOGENOUS BUT ONLY 37% RESPONDS TO OUTPUT PRICES AND TO THE OPPORTUNITY COST REPRESENTED BY THE FISH PRICE • THE REST IS TIED TO CAPTURE WHICH ARE CONTROLLED AND EXOGENOUS • FISH MEAL AND OIL PRODUCTION FROM FISH RESIDUE IS TIED TO FISH PRODUCTION USED FOR FOOD CONSUMPTION

  7. DEMAND • OWN PRICE ELASTICITY OF FISH AND SEAFOOD DEMAND IS SLIGHTLY LOWER THAN MEAT IN MOST COUNTRIES • INCOME ELASTICITY OF FISH AND SEAFOOD DEMAND IS SIMILAR TO THOSE OF MEATS • PRICE OF FISH AS AN OPPORTUNITY COST AFFECTS 37% OF WORLD REDUCTION (CRUSH) DEMAND • DEMAND FOR OTHER USES IS KEPT EXOGENOUS • STOCK DEMAND IS IN GENERAL SMALL AND KEPT EXOGENOUS • DEMAND FOR FISH OIL AND MEAL RESPOND TO THE NEED OF AQUACULTURE, THE OWN PRICE AND THE PRICE OF OILSEED PRODUCTS - IN GENERAL THE ESTIMATED ELASTICITIES SHOW STRONG SUBSTITUTION BETWEEN FISH AND OILSEED PRODUCTS

  8. PRICE DATA • EXCEPT FOR AQUACULTURE ALL OTHER PRICES CORRESPOND TO THE VALUE OF TRADE (THE SUM OF IMPORT AND EXPORT) DIVIDED BY QUANTITY TRADED FOR COUNTRIES & WORLD • AQUACULTURE PRICE CORRESPONDS TO PER UNIT VALUE OF PRODUCTION • WORLD PRICE OF CAPTURE IS IS FROM FAO • CONSUMER PRICES ARE RETAIL PRICES • PRICE OF FISH OIL AND MEAL ARE NORTHERN EUROPE

  9. PRICE EQUATIONS • COUNTRY FISH PRICE IS CALCULATED IN THE DOMESTIC MARKET CLEARING IDENTITY • COUNTRY AQUACULTURE PRICE IS TIED TO FISH PRICE AND TO THE RATIO OF AQUACULTURE TO TOTAL PRODUCTION • DOMESTIC FISH MEAL AND OIL PRICES ARE CALCULATED IN A PRICE TRANSMISSION EQUATION • CONSUMER PRICE IS A FUNCTION OF FISH PRICE AND GDPD DEFLATOR AS A PROXY FOR OTHER COSTS • WORLD PRICES OF FISH, FISH MEAL AND OILS CLEAR IN THE IDENTITY BETWEEN TOTAL IMPORTS AND EXPORTS • WORLD AQUACULTURE PRICE IS CALCULATED FROM THE SUM OF VALUE OF PRODUCTION AND PRODUCTION • WORLD CAPTURE PRICE IS CALCULATED USING OVERALL FISH AND AQUACULTURE PRICE AND THE SHARE OF THE RESPECTIVE PRODUCTION

  10. TRADE EQUATIONS • FISH MEAL AND OIL IMPORTS OR EXPORTS ARE CALCULATED IN THE MARKET CLEARING IDENTITY • FOR FISH, IMPORTS AND/OR EXPORTS ARE A FUNCTION OF THE RATIO BETWEEN THE DOMESTIC PRICE AND TRADED PRICE - IN THE CASE OF EXPORT, THE TRADED PRICE IS THE WORLD PRICE IN LOCAL CURRENCY - IN THE CASE OF IMPORT, THE TRADED PRICE IS THE WORLD PRICE PLUS TRANSPORT COST PLUS TARIFF IN LOCAL CURRENCY - ELASTICITIES WERE ESTIMATED OR CHOSEN TO INSURE THAT THE TRANSMISSION BETWEEN WORLD AND DOMESTIC PRICE WAS CONSISTENT WITH THE CORRELATION COEFFICIENT

  11. RECENT AND NEXT STEPS • REVISION OF THE FISH MEAL DEMAND FUNCTION OF AGLINK • REVISION OF THE FISH DEMAND ELASTICITIES • REVISION OF THE FISH MEAL DEMAND FUNCTION OF COSIMO • INCLUDING THE CONSUMER PRICE OF FISH IN THE MEAT DEMAND FUNCTIONS • BUILDING A CONSISTENT DISAGGREGATED SATELLITE FISH MODEL

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