Abstract
Although food self-sufficiency is regarded as a potent strategy to secure food supply in the policy circle, the efficacy of policy measures, especially in terms of their quantitative effects, is still not fully understood. We analysed the relationships between international and local prices of pork between January 2001 and December 2018 for 10 net pork-importing countries. The primary outcome obtained in our research is that high self-sufficiency and a small trade volume of pig meat commodities could impair price volatility transmission from the global market. This result does not suggest that a protectionist regime should be established to stabilise the national food supply. It presents useful information to balance the benefit from highly efficient resource allocation and the market steadiness gained from higher self-sufficiency in food, considering the maximisation of the expected utility of economic agents.
Highlights
Known as an important source of protein, swine meat comprises over one-third of meat products in the world and is, a critical component of food security (VanderWaal and Deen, 2018)
To fill the knowledge gaps indicated above, this study focuses on causal relationships and dynamic conditional correlations (DCCs) to identify the volatility spillover between global and local prices for 10 net pork-importing countries with generalised autoregressive conditional heteroskedasticity (GARCH)-type models
The coefficients of trade volume rate (TVR) range from 0.133 (PCSE model) to 0.207. These results indicate that an increase in the TVR of pork will increase the value of exports and imports in local countries, which in turn strengthens the correlation between global and local pork markets
Summary
Known as an important source of protein, swine meat comprises over one-third of meat products in the world and is, a critical component of food security (VanderWaal and Deen, 2018). In 2020, a case of ASF was confirmed in Germany, leading to an import ban on German pork by China, South Korea, and Japan (Merco Press, 2020) These events destabilised pork export prices in the chief exporting markets such as the EU, the US, Brazil, and Canada and induced an 86% domestic price increase in China. To fill the knowledge gaps indicated above, this study focuses on causal relationships and dynamic conditional correlations (DCCs) to identify the volatility spillover between global and local prices for 10 net pork-importing countries with generalised autoregressive conditional heteroskedasticity (GARCH)-type models. We consider beef consumption as one of the explanatory variables in the panel data analysis, as beef could be a substitute for swine meat, partially absorbing the price spillover effects of imported pork through a decrease or increase in pork demand. Section “Concluding remarks” summarises the conclusions and describes some limitations and future investigations
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