Salmon Market Research Articles

The role of news sentiment in salmon price prediction using deep learning

This paper employs deep learning models and sentiment analysis to predict salmon spot prices. Our data includes historical price data and sentiment scores from 2018 to 2022. We extract sentiment scores from salmon-related news headlines by using FinBERT and TextBlob. We begin with price prediction using only historical price data and then introduce sentiment scores to improve the prediction accuracy of deep learning models. We find that the prediction performance of deep learning models outperforms traditional prediction methods in the salmon market. Our primary hybrid CNN-LSTM model outperforms other deep learning models and traditional models. Additionally, deep learning models incorporating sentiment scores exhibit reduced prediction errors. Our findings confirm the value of sentiment information in improving forecasting performance. These findings highlight the effectiveness and robustness of our CNN-LSTM model combined with sentiment analysis for price prediction in the salmon market.

Cross-hedging wild salmon prices

A number of studies have documented that there is a global market for salmon, in which wild and farmed salmon have a common price determination process. Recent studies report that Norwegian farmed salmon spot prices are also highly correlated with the Fish Pool salmon future contract price, indicating that the futures market can be an important risk management tool, as producers and buyers can hedge price risk. Here, we investigate whether the wild salmon prices can be cross-hedged against the Fish Pool salmon future contract, by testing whether the two prices are correlated.. If so, the Fish Pool future contracts can be used as a risk management tool for fishers and buyers of wild salmon. We find that this is the case, providing an additional link between wild and farmed salmon specifically, and between fisheries and aquaculture generally.

Swimming in Pools: Collusion in the Salmon Market

We study the events alleged in recent Norwegian salmon industry antitrust cases to explore the relationship between vertical integration, public price indexes, and collusion. The salmon market provides an intriguing opportunity to study these issues, as there was a vertical merger followed by a reformulation of the methodology by which prices were reported for a new price index. We explore whether the confluence of the merger and the creation of the Nasdaq price index is associated with evidence consistent with collusion. JEL codes: L13, L41, L42, Q22

The welfare impacts of Covid-19 on the U.S. salmon sector

ABSTRACT This research estimates the effects of COVID-19 on the U.S. supply and demand for salmon over two distinct periods. The first period reflects the first year (2020) since the COVID-19 outbreak, and the second period covers the outbreak’s second year (2021). The effects of COVID-19 on salmon prices, domestic production, and imports are analysed through graphics, elasticities, and spatial welfare economics derived from the equilibrium displacement model of the U.S. salmon market. In the first year, COVID-19 caused a reduction in domestic demand. As a result, U.S. salmon producers and consumers lost $302 million. Consumer loss accounts for 87% of this value. In 2021, however, domestic consumption recovered, with a positive effect of $447 million on consumers, outweighing the negative impact from 2020. Together, the domestic producers and consumers gained approximately $512 million. The net market gain (a combination of the first- and second-year effects) was $210 million. These results are subject to the magnitudes of change in demand and supply due to COVID-19 and transportation costs.

Price relationships along the Norwegian salmon value chains: A comparative study of the leading consumption market in France and the largest processing industry in Poland

This study investigates price relationships along the Norwegian salmon value chains in France, the EU’s leading consumption market for salmon, and Poland, the EU’s largest “processing hub.” Using a vector error correction model framework, our results indicate that the salmon price determination is a supplier-driven process, with the export prices in Norway influencing prices in France and Poland, but not vice versa. Results also suggest that price linkages are strong between the export market in Norway and the retail market in France and the processing industry in Poland; however, the Polish retail sector is separated from markets at the upstream level, while price discovery at the French wholesale market is dominated by the retail market. Our findings imply that the evolved market structures lead to efficiently functioning retail markets in France and wholesale markets in Poland, but put the French wholesale and Polish retail markets at a disadvantage.

Swimming in Pools: Collusion in the Salmon Market

Swimming in Pools: Collusion in the Salmon Market

Salmon trout, the forgotten cousin?

This study investigates potential economic reasons why the production of trout is maintained in Norway by analyzing prices and production for Norwegian Atlantic salmon and trout. The species Atlantic salmon dominates the global salmon market, but its two largest producers, Norway and Chile also farm in sea pens significant quantities of large rainbow trout (as opposed to portion-sized Rainbow trout farmed in freshwaters in other parts of the World, e.g., Iran, Peru, Turkey, and others). Suggesting that these trout have some attributes that make it a useful complement to Atlantic salmon. We investigate development in supply volumes of these species and conduct a cointegration analysis using monthly prices from 2000 to 2018. The results show that the markets for fresh and frozen rainbow trout are tightly integrated with fresh Atlantic salmon, and, where the latter is a price leader. This means that many consumers consider the two products as substitutes, with no clear preferences. There is no apparent productivity argument for the continued production of rainbow trout vis-à-vis Atlantic salmon. However, there may exist a fringe of consumers that prefer its characteristics, motivating firms to maintain its production as a means of diversification.

Market integration and price leadership: The U.S. Atlantic salmon market

When markets are integrated and the law of one price holds, prices confronted by different producers should tend to uniformity, in the long run, allowance is made for differences in quality and transportation costs. However, how producers coordinate to align prices is not obvious and probably the answer will vary between markets. In this article, we investigate this question using salmon prices differentials, for the main export countries—Canada, Chile, Norway, and the United Kingdom—of farmed Atlantic salmon in the United States market. The results indicate that there is a single common stochastic trend for the prices of the main suppliers of farmed Atlantic salmon in the United States market. Moreover, the Law of One Price cannot be rejected, implying that farmed Atlantic salmon from the different producers are perfect substitutes for U.S. consumers and that markets are fully integrated. Finally, testing for price leadership, we find that the main exporters follow the lead of the least cost-efficient producer, the United Kingdom.

Growth, osmoregulation and energy budget of rainbow and steelhead trout under different salinity acclimation methods and the best transition size of steelhead trout

In order to meet the demand of salmon market, Chinese scientists and entrepreneurs are working on salmon mariculture far offshore in the Yellow Sea, China. Rainbow, steelhead trout and Atlantic salmon were selected as the main culture species. The aims of the present study were as follows: (a) investigate the effect of the salinity acclimation method on the growth, osmoregulation and energy budget in two forms of Oncorhynchus mykiss, rainbow and steelhead trout and (b) explore the optimal size of steelhead trout for the seawater entry. In trial I, rainbow (mean = 99.44 g) and steelhead trout (mean = 99.01 g) were reared for 40 days after undergoing salinity acclimation at three rates: an abrupt increase in salinity from 0 to 30 g/L (T30); an abrupt increase in salinity to 14 g/L, followed by a daily increase of 2 g/L (T2) or 6 g/L (T6) until reaching 30 g/L; and no salinity exposure (control treatment) (T0). In trial II, steelhead trout with body weights of approximately 100 and 400 g were cultured for 60 days with two treatments, T0 and T2, and the specific growth rate (SGR) was calculated every 10 days. In trial I, in both kinds of fish, the optimal growth performance, survival rate, osmoregulation and energy budget were observed in the T0 treatment, followed by the T2 treatment. These results indicate that O. mykiss with a body weight of approximately 100 g can adapt to sea water with a gradual transition (T2), but they are still not suitable for the seawater entry because of low growth. Based on the recorded SGRs in trial II, our formulated regression formula revealed that approximately 200 g is the optimal size of steelhead trout for the transition to sea water.

Analysis of the risk premium in the forward market for salmon

We analyse forward prices observed at the Fishpool market, and propose a two-factor continuous-time stochastic process for modelling the time dynamics. The data analysis reveals that the two factors can be assumed to be a non-stationary compound Poisson process and a stationary continuous-time autoregressive dynamics, describing the bumps observed in the forward curves. We use the model to analyse the risk premium in the forward markets, and find a negative premium in the long end of the market which is in line with the theory of normal backwardation. However, contracts with short time to maturity have a risk premium with randomly changing sign, pointing towards a hedging pressure also induced by the demand-side of the market.

MARKET SHOCKS IN SALMON AQUACULTURE: THE IMPACT OF THE CHILEAN DISEASE CRISIS

AbstractSeveral studies indicate an integrated global market for salmon. However, there is increasing evidence of market segmentation for various seafood species. A disease crisis in Chile that reduced production by two-thirds provides a strong market shock that can shed light on how strongly integrated the salmon market is. Our results indicate that Chilean producers changed the product mix and export markets as a result of the disease shock. Yet, the relative prices remained constant, indicating a high degree of market integration. Moreover, Chilean prices are endogenous to the Norwegian price, indicating that prices are determined at the global market.

What can we learn from a sanitary crisis? The ISA virus and market prices

ABSTRACTWe analyzed whether a competitive market can behave non-competitively when it is temporarily outside of its long-run equilibrium trajectory. Our data sample allowed us to examine the functioning of the Atlantic salmon market in the United States when experiencing a sharp reduction in imports because of a sanitary outbreak that affected its Chilean suppliers. We estimated the Steen and Salvanes extension of the Bresnahan–Lau model. Our results show that in the long run, the market behaves competitively. However, there is evidence of a disequilibrium effect on price in the recovery phase of the crisis. The decrease in the price observed during the recovery was caused by supply overshooting, whereas the increase in salmon’s market price observed right after the disease outbreak cannot be attributed to reduced Chilean supply.

The spot-forward relationship in the Atlantic salmon market

ABSTRACTThis 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.

Salmon price volatility: A weight-class-specific multivariate approach

ABSTRACTSalmon spot price has been highly volatile and hard to predict since mid-2000s, obscuring the industry players’ planning decisions. ARMA-GARCH and dynamic conditional correlation (DCC) models were employed on weekly data for 1995–2013 to examine the behavior of weight-class-specific prices which are directly relevant for salmon production and risk management. Two periods of different volatility regimes were identified, before and after 2006 when the salmon market was undergoing fundamental changes. Both volatility and conditional correlations increased from 1996–2005 to 2007–2013, and return dynamics became more homogenous across weight classes. This development is conducive to the functioning of the salmon futures and options exchange.

Testing Advertising-Induced Rotation of Demand Curves in the EU Salmon Market

The Almost Ideal Demand System (AIDS) is estimated to examine the responses for salmon promotion conducted by the Norwegian Seafood Council (NSC) in the EU Atlantic salmon market. The model allows advertising to shift and rotate the demand curve simultaneously. EU demand is segmented by supply sources of the salmon, namely Norway, the United Kingdom, Chile, Canada, and the Rest of World. Results suggest that a 10% increase in advertising expenditure sponsored by the NSC makes the demand curve of Norwegian salmon and Canadian salmon rotate counterclockwise by 0.54% and 10.3%, respectively, and the curve for the Rest-of-World salmon rotate clockwise by 4.09%. In our empirical case of salmon demand, the impact of advertising-induced rotation on the optimal spending level and the change in producer surplus is significant when the advertising expenditure is greatly intensified, the export volume is huge and the supply is less elastic.

Disentangling supply and demand shifts: the impacts on world salmon price

To understand price changes, one must determine the relative impact of supply and demand shifts on price. Conditional on predetermined supply and demand elasticities, we retrieve yearly shifts in regional supply and demand. The relative impact on price from each supply and demand shift is determined through an equilibrium displacement model (EDM). This procedure is applied on a yearly basis for the world salmon market in the period 2002 to 2011. The results indicate a large variation in demand and supply growth both over time and between regions. While average annual price impacts from supply or demand shifts from most regions are not statistically significant, price impacts from supply or demand shifts for specific periods are detected in all but one region. This indicates that the use of smooth trend indicators is likely to be inappropriate for measuring supply and demand shifts and their impacts on price. The procedure presented in this article can be a useful instrument for determining the relative impacts of supply and demand shifts on price in any market with unstable price behaviour.

RECENT TRENDS IN SALMON PRICE VOLATILITY

The price of farmed Atlantic salmon from Norway has increased in recent years. This new regime follows several years of consistently falling prices. At the same time price volatility has increased substantially. This article models the volatility of salmon prices and establishes empirically that volatility is on an increasing trend. Further empirical analysis suggests that the volatility trend is largely accounted for by the common trend in other food prices relevant to salmon, including meats, cereals, oils and fish meal observed in recent years. Other potentially contributing factors to volatility are also discussed. This includes the role of the 2005 maximum total allowable biomass restriction, the 2006 introduction of the Fish Pool ASA futures market for salmon, the Chilean Salmon crisis and the increasing use of bilateral contracts.

SCIENTIFIC STOCHASTIC VOLATILITY MODELS FOR THE SALMON FORWARD MARKET: FORECASTING (UN-)CONDITIONAL MOMENTS

This article applies the General Scientific Model methodology of Gallant and McCulloch implementing MCMC simulation methodologies to build a multifactor stochastic volatility model for the mean and latent volatility for the Fish Pool front month salmon market. Stochastic volatility is the main way time-varying volatility is modeled in financial markets. Our main objective is therefore to structure a scientific model specifying volatility as having its own stochastic process. Appropriate model descriptions broaden the applications into derivative pricing purposes, risk assessment and asset allocation. The article reports risk and portfolio measures, conditional one-step-ahead moments, particle filtering for one-step-ahead conditional volatility, conditional variance functions for evaluation of shocks, analysis of multi-step-ahead dynamics, and conditional persistence. The analysis adds market insight and enables forecasts to be made, thus building up methodologies for developing valid scientific models for commodity market applications.

Consistent Aggregation in Fish Demand: A Study of French Salmon Demand

Product aggregation levels in the seafood demand literature are normally selected based on the research objectives rather than on empirical tests. This study applies the Generalized Composite Commodity Theorem (GCCT) developed by Lewbel (1996), to test the aggregation of French household demand of salmon. The results indicate that demand for salmon can be aggregated based on product form (i.e., fresh, frozen, and smoked salmon). These composites can be further aggregated into a single salmon category. Salmon demand can, therefore, be estimated using a system which only includes salmon equations. The composite demand elasticities estimated by the AIDS model suggest that fresh and smoked salmon significantly substitute each other in the French salmon market. This means that the estimation of an import demand system that does not include smoked salmon cannot really explain real consumer demand. The results also suggest that wild salmon is playing in a different market niche than farmed salmon.

RCA Analysis on Norwegian Salmon Exports to China

The purpose of this paper is to analyze the comparative advantage of salmon products from Norway in China salmon market compare with other main salmon exporting countries, such as Chile, Canada Japan and U.S.A. Firstly, we give a general introduction of Norwegian salmon exports, then we apply Balassa’s Revealed Comparative Advantage index and modify it according to this case, then make analysis on the basis of calculated RCAs.