Price Transmission Relationships along the Seafood Value Chain in Bangladesh: Aquaculture and Capture Fisheries

Abstract

There is a general concern among policy makers that seafood prices may not be proportional along the value chains in Bangladesh. This article investigates causal and price transmission relationships between wholesale and retail prices for five fish species in Bangladesh that include: hilsa (Tenualosa ilisha), rohu (Labeo rohita), catla (Catla catla), pangas (Pangasius hypophthalmus), and tilapia (Oreochromis mossambicus/O. niloticus). Causal relationships between wholesale and retail prices were tested using the Granger causality test while asymmetries in price transmission were examined using the Houck and Ward approach as well as the error-correction approach. The results show that the direction of causality in prices was from retail to wholesale in many of the value chains analyzed, indicating influence of retail price on wholesale price in the Bangladesh fish sector. In general, the price transmission was found to be symmetric in the short-run while a mix of symmetric and asymmetric in the long-run. The results also show variation in price transmission behavior between aquaculture and capture fisheries products. The retailers of aquaculture products, compared to their fisheries counterparts, are less likely to be in a position to easily pass through falling prices to wholesalers and farmers. For aquaculture products, elasticities of price transmission from retailer to wholesaler were generally greater from increases in price than from decreases in price.