Price Discrimination in the Context of Vertical Differentiation: An Application to Canadian Wheat Exports

The ability of the Canadian Wheat Board (CWB) to price discriminate in wheat exports is examined. The conceptual model shows that the CWB's ability to exploit cost differences in pricing depends on the extent of differentiation between Canadian and U.S. wheat. This model is implemented using monthly confidential price data for exports to four markets from 1982 to 1994. The empirical results support the conclusions that (1) the CWB has market power emerging from product differentiation, (2) the CWB price discriminates across export markets, and (3) Alchian–Allen effects are important in pricing in markets valuing quality such as Japan and the United Kingdom.     

Regulating State Trading Enterprises in the World Trade Organization: An Urgent Need for Change? Evidence from the 2003–2004 U.S.–Canada Grain Dispute

Article XVII of the General Agreement on Tariffs and Trade is the main World Trade Organization (WTO) vehicle for regulating trade-distorting policies implemented through state trading enterprises (STEs). The effectiveness of Article XVII depends on how WTO dispute panels and the Appellate Body interpret the provisions. This study examines the 2003 WTO trade dispute case between the United States and Canada over Canadian grain imports and the practices of the Canadian Wheat Board, an export STE. We conclude that the WTO panel and Appellate Body rationales for their findings demonstrate that Article XVII needs substantial revision for the WTO to discipline STE trade-distorting practices.     

Compatibility of Government Guarantees with Flexibility in Canadian Wheat Price Pooling

Financial option theory is used to evaluate Canadian Wheat Board (CWB) price pooling and associated government guarantees. Price guarantees and final payments on the pool can be viewed as special financial derivative products. Financial models are used to evaluate alternative pricing flexibility alternatives within the constraints of the CWB price pooling system and at the same time to provide a measure of the CWB dollars at risk associated with offering these contracts. Flexible pricing alternatives are incompatible with a government price guarantee that is valuable. The CWB dollar risk associated with flexible pricing could be substantial.
Les auteurs recourent à la théorie des contrats d'option pour évaluer le système de fixation de prix communs par la Commission canadienne du blé (CCB) et les garanties connexes du gouvemement. On peut considérer les prix garantis et les paiements finals du pool comme un type particulier de produits dérivés. Des modéles financiers permettent d'évaluer d'autres méthodes qui autoriseraient la fluctuation des prix dans les contraintes du systéme de pool de la CCB, mais serviraient aussi à mesurer les risques financiers de la CCB associés à la proposition de contrats. Les autres méthodes de fixation des prix sont incompatibles avec une garantie valable du gouvemement au niveau des prix. La CCB courrait le risque de penes importantes si elle adoptait une politique de variation des prix.     

Analysis of the export Constraint on Canadian Wheat In 1977/78

The analysis suggests that Canadian wheat exports in 1977/78 were reduced by an amount between 0.7 and 1.7 million metric tons because of a constraint due to transportation and handling problems. Estimates are made of the effect of this export constraint on domestic utilization, supply and the off-Board price. Estimates are also made of the effects on these variables of three possible Canadian Wheat Board (CWB) strategies for handling the export constraint. The strategies involve the use of delivery quotas and the initial payment as instruments of the CWB.
L'analyse suggère que les exportations canadienes de blé ont été réduites en 1977/78 d'un montant compris entre 0.7 et 1.7 millions de tonnes. Ces réductions sont dûes a l'effet d'une contrainte posée par des problèmes de transport et de maniement. L'impact de cette contrainte sur les exportations a étéégalement estimé sur la demande domestique, sur I'offre et sur le prix hors-Commission. Les effets sur ces mêmes variables ont été aussi quantifies en utilisant trois strategies possibles de la Commission Canadienne du Blé (CCB). Ces stratégies invoquent l'utilisation par la CCB de différents niveaux de quotas de livraison et de paiement initial.     

A Perspective on Canadian Wheat Board Exports, Price Pooling, and West Coast Capacity Constraints

This paper illustrates that Canadian Wheat Board (CWB) price pooling provides an important function in western Canada, which is to redistribute returns from the scarce resource of west coast capacity to all western grain producers. The manner in which this distribution occurs has equity implications. A corollary is that the need for prairie wide price pooling by the CWB for distributional considerations diminishes as the west coast export constraint is eliminated. The analysis suggests another conclusion which is that the current set of grains should continue to be exported through only the CWB. Failing that, non-CWB grain exports through the private market should share in the export constraint. Another distributional implication is that reductions in the capacity constraint disadvantages the western livestock industry. Cette étude démontre que l'établissement de la tarification par la Commission canadienne de blé exerce une fonction importante dans l'ouest canadien, qui est de redistribuer les revenues tirés des ressources réduites de la côte du ouest à tous les producteurs de grain dans l'ouest. La manière que cette distribution a lieu a des répercussions en matière d'équité. Un corollaire est que le besoin d'un établissement de la tarification dans les prairies par la Commission canadienne de blé pour des considérations de distribution diminue à mesure que la contrainte d'exportation de la côte de l'ouest est éliminée. L'analyse suggère une autre conclusion selon laquelle les variétés de grains actuelles devraient continuer à être exportées a travers la Commission canadienne de blé seulement. Sinon, les exportations de grains qui ne sont pas visées par la Commission canadienne de blé et que passent à travers le marché privé devraient assumer leur part dans la contrainte d'exportation. Une autre implication sur la distribution est que les réductions dans les contraintes de capacité désavantagent l'industrie d'élevage de l'ouest.     

The Potential Impacts of State Trading Enterprises on World Markets: The Exporting Country Case

Export state trading enterprises (STEs) play an important role in global agricultural trade. STE behavior has significant implications for world food markets, irrespective of whether or not these markets are inherently competitive. Previous literature has suggested that STEs have market power and can earn oligopolistic rents. We find there is no compelling empirical evidence to support this argument. However, we show the cross-commodity effects of export STEs can disrupt competitive world markets, through offering an implicit export subsidy to a downstream industry.     

Deregulation as (Welfare Reducing) Trade Reform: the Case of the Australian Wheat Board

State trading enterprises are distinguishable from private, commercial firms by the nature of their exclusive rights and objectives. Deregulation of the Australian Wheat Board is used to illustrate the effects of these rights and objectives on trade and welfare. Theoretical models are specified and the effects measured through calibrated, partial equilibrium models. It was found that the successive deregulations of the Australian Wheat Board caused it to switch from being equivalent to an export subsidy to, today, being equivalent to an export tax. At the same time, deregulation has not necessarily been welfare enhancing.     

Single Desk Selling by the Canadian Wheat Board: Does It Have an Impact?

The Canadian Wheat Board justifies its monopoly control over the marketing of barley on the basis of single desk selling. It argues that single desk selling raises the pooled price that farmers receive for their barley over a situation where the Canadian Wheat Board does not have monopoly control over the marketing of prairie barley. Carter (1993b) argues that the Canadian Wheat Board's pricing strategies are suboptimal and the Canadian Board cannot act prices farmers receive. This paper tests the implications of the Canadian Wheat Board's conclusions and Carters conclusions using feed grain prices. The results indicate that Canadian Wheat Board single desk selling has no impact on prices. These results indicate that Carter's analysis is more consistent with the data than is the Canadian Wheat Board's analysis.     

QUALITY PREMIUMS FOR AUSTRALIAN WHEAT IN THE GROWING ASIAN MARKETS

An hedonic price function is applied to Australia's wheat exports to the growing Asian markets. The values for the quality characteristics in the wheat markets of Indonesia, Malaysia, Singapore, South Korea, and Thailand are estimated. The data base for the study is from the Australian Wheat Board shipments over the period 1984 to 1991. The sample is divided into two separate time periods to test the consistency in demand for export wheat and to trace recent trends in quality premiums. The implications of the results for wheat marketing and trade are explored.     

Pricing‐To‐Market Analysis: The Case of EU Wheat Exports

The EU is a major player in the global wheat market. This paper examines the pricing behaviour of EU wheat exporters using a pricing‐to‐market (PTM) analysis. Wheat is an exemplary product for testing PTM theories as it is widely and frequently traded, and largely unbranded. We estimate the relationship between export unit values and exchange rates using quarterly panel data for 11 EU export destinations for 2000–2013. Results show that there is a meaningful long‐run relationship between export unit values and exchange rates, but there is little evidence of differential mark‐ups between EU export markets. Belarus and Iceland are exceptions where exporters from the EU appear to exercise local currency price stabilisation.     

State trading deregulation and prairie durum wheat production

We estimate the impact of the 2012 removal of the Canadian Wheat Board's (CWB) single-desk on the spatial pattern of durum wheat acres in Western Canada. We analyze changes in durum seeded acres with a panel regression and Census Agricultural Region data from 2004 to 2016. Our results indicate that removal of the CWB single-desk had a significant impact on total durum production in Western Canada. In addition, we find that the spatial distribution of durum wheat acres shifted away from marginal durum-growing areas and toward drier areas, an increase in specialization that arguably improved the efficiency of resource allocation.     

State Trading Enterprises in a Differentiated Product Environment: The Case of Global Malting Barley Markets

This study tested if the exclusive procuring and pricing policies of two state trading enterprises (STEs) in international malting barley markets could be used in a strategic trade context. The research provided four key findings. First, the global malting barley market operated in a quantity-setting oligopolistic structure during the study years. Second, both STEs and other exporting countries were in Cournot competition and thus made available strategic trade possibilities. Third, initial commodity payments were too high to generate a rent-shifting outcome. Fourth, product differentiation was confirmed, which may have dampened the desire/ability of STEs to pursue a rent-shifting objective.     

WESTER WHEAT MARKETING IN ONTARIO

The purpose of this paper is to assess the success of the Ontario Wheat Producers' Marketing Board in fulfilling the need which prompted its formation. Its prime objective was to increase, by various means, the proceeds received by producers from the sale of winter wheat. This paper will focus on the Board's efforts to raise these returns by means of its minimum price policy. Empirical problems greatly hindered the evaluation. The conclusions reached have largely been derived from logical deductions rather than from refined statistical techniques.     

AN EVALUATION OF PRICING PERFORMANCE OF THE CANADIAN FEED GRAINS POLICY

Models, both theoretical and econometric, were developed to examine the pricing performance of the Canadian feed grains policy. An 18 equation econometric model, comprising three levels; farm, Canadian Wheat Board and domestic open market, provided the means to measure intermarket price relationships empirically. The model was further simulated for two policy situations, changes in domestic barley stocks and exports. The analytical results support the theoretical contention that the structure of the feed grains market (policy) does not lead to price efficiency. Results showed that performance was dependent upon Canadian Wheat Board export policy and producer marketing decisions which in turn are influenced by the feed grains policy and associated marketing structure. Des modèles théoriques et des modèles économétriques ont été développés avec le but d'examiner le fonctionnement, à l'ègard des prix, de la politique des grains alimentaires au Canada. Un modéle économetrique àéquations, comprenant trois niveaux; la ferme, La Commission Canadienne du Blé, et le marché libre domestique; a produit le moyen de mesurer empiriquement les rapports entre les cours de marche. Le modèle a ètè simulé, en addition, pour examiner deux situations politiques, les changements dans les stocks domestiques et dans les expoetations de l'orge. Les résultats analytiques donnent appui à l'hypothèse théorique que la structure du marché des grains alimentaires (la politique) ne mène pas à l'efficacité de la détermination des prix. Les résultats ont montré que le fonctionnement dépendait de la politique d'exportation de la Commission Canadienne du Blé et des décisions marchandes des producteurs qui, à leur tour, sont influencées par la politique des grains alimentaires et par la structure marchande y associée.     

MARKETING AUSTRALIAN BEEF AND EXPORT DIVERSIFICATION SCHEMES*

The Australian Meat Board (AMB) can influence the quantities sent to and the prices received for Australian beef and veal in the domestic and various export markets. Through its power to grant export licences and the conditions to be met in obtaining export licences the AMB can adopt the role of a price discriminating monopolist without supply control. This paper evaluates the price, quantity, efficiency and distribution effects of the export diversification scheme introduced by the AMB in 1968, of some modified schemes proposed in 1976, and of an alternative system whereby rights to export to premium export markets with quota restrictions are auctioned.     

Forecasting Market Share for Non-Traditional Agricultural Exports

Economic and financial feasibility of projects that are being presented for potential funding by financial agencies depend, among others, on the soundness of assumptions made about the niche in the market which the contemplated enterprises are to fill. This type of market share forecasting is particularly hazardous for entrepreneurs in less developed countries (LDCs), who aim at penetrating export markets for non-traditional agricultural commodities. In this article the author: (a) reviews the methodology used by an Uruguayan enterprise, which decided to export summer citrus to markets in the Northern Hemisphere; (b) shows how these procedures for market share forecasting could be readily adapted to preparation of feasibility studies for enterprises aimed at penetrating export markets for other non-traditional products; and (c) explores the macro-marketing implications of the case study for off-season export of fresh produce from the Southern Hemisphere to consumer centers in North America, Western Europe and Japan.     

Transparency and Bidding Competition in International Wheat Trade

One of the trade policy issues identified by U.S. interests, including grower groups, traders and policy makers, is price transparency. This has been a point of contention between the United States and Canada as well as other exporting countries with state trading enterprises (STEs). The transparency problem generally refers to the inability to observe terms of trade (including price, quality, credit, etc.)offered by STEs, and the potential strategic advantage this provides in bidding competition. A game theory model of import tendering is developed in this paper to examine the effects of information asymmetry among rivals. Several stylized examples are used to illustrate aspects of competition and to analyze effects on bidding strategies. Results indicate that:

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  Less uncertainty among rivals reduces equilibrium bids and prices.

       
  
  

中德两国木质家具出口贸易的比较研究——基于1997--2009年数据的实证分析

通过1997--2009年的贸易数据对中德两国的木质家具出口贸易进行了比较研究。利用CMS模型测算了拉动两国木质家具出口增长的原因,进而通过显性比较优势指数和贸易结合度指数的测算,实证分析了中德两国各自具有比较优势的产品类型以及双边木质家具贸易的结合程度。结果发现,竞争力效应和一般增长效应分别是拉动中国和德国木质家具出口增长的主要因素,两国分别在不同种类的产品上具有比较优势且两国问的木质家具贸易结合程度不高,具有巨大的合作发展潜力。     

The effect of the Canada–China canola trade dispute on canola prices

In March 2019, China revoked the canola export licenses of two major Canadian exporters. We estimate the impact of these restrictions on Canadian canola prices. Using a vector error correction model to generate counterfactual prices, we estimate that between March 2019 and February 2020 canola prices were 3.6% lower than would have been expected in the absence of the import restrictions. We discuss the implications of our finding for both the ongoing negotiations between Canada and China and producer support in Canada.     

中国松香产品对外贸易特征与结构分析——基于2001~2011年数据

对2001²011年中国松香产品对外贸易特征及结构进行实证分析研究的结果表明:中国松香产品贸易以出口为主,进口量相对较小;近年来松香出口额增长迅猛,但进口额增长乏力;国际松香价格一路高涨,而中国松香产品出口价格远低于进口松香价格;松香进出口均主要集中于380610和380690两类松香,出口主要集中于欧盟、美国、日本和韩国,出口市场集中率较高。因此,提出主动实施松香深加工和品牌战略、控制松香出口规模、多元化出口市场战略、关注新兴市场等对策建议。