Price transmission relationships in Taiwan seafood supply chain: Tilapia (<i>Oreochromis niloticus</i>) and milkfish (<i>Chanos chanos</i>)

Abstract

Tilapia and milkfish are aquaculture species associated with the highest production volume in Taiwan. With both fish species as the research focus, this study explored their price transmission relationships along the seafood supply chain. Our study results revealed that tilapia and milkfish prices had a long-run equilibrium relationship at different stages of the seafood supply chain and presented inconsistent price transmissions in the short run. There are domestic and foreign market channels for tilapia, enabling producers and wholesalers to transmit prices to retailers. By contrast, milkfish are mostly supplied to domestic markets, there is not perfect price transmission in the milkfish supply chain besides between farmers and wholesalers. An accurate price forecasting model can effectively indicate future price volatility and predict seafood prices, especially following government policy changes or in the face of external impacts. Such model can also serve as a crucial reference for future research of tilapia and milkfish industry, producers, and aquaculture farmers. Finally, seafood prices are a key determinant of fisheries and supply chain sustainability. Therefore, the stability of seafood prices, fish market wholesale pricing, and retail pricing are issues meriting continuous attention for a sustainable seafood supply chain.