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Clarifying Trade Costs: Maritime Transport and its Effect on Agricultural Trade

Author

Listed:
  • Jane Korinek

    (OECD)

  • Patricia Sourdin

    (University of Adelaide)

Abstract

Maritime transport costs have a significant impact on the trade in agricultural goods. Maritime transport costs represent a high proportion of the imported value of agricultural products -- 10% on average, which is a similar level of magnitude as agricultural tariffs. This study shows that a doubling in the cost of shipping is associated with a 42% drop in trade on average in agricultural goods overall. The tendency to source imports from countries with low transport costs is therefore strong. Trade in some products is particularly affected by changes in maritime transport costs, in particular cereals and oilseeds, which are shipped in bulk. Time spent in transit also has a strong effect on trade: an extra day spent at sea on an the average sea voyage of 20 days implies a 4.5% drop in trade between a given pair of trading partners. Not only cost but also efficiency in getting agricultural goods to market are therefore important factors in explaining trade flows.

Suggested Citation

  • Jane Korinek & Patricia Sourdin, 2009. "Clarifying Trade Costs: Maritime Transport and its Effect on Agricultural Trade," OECD Trade Policy Papers 92, OECD Publishing.
  • Handle: RePEc:oec:traaab:92-en
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    File URL: http://dx.doi.org/10.1787/220157847513
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    Cited by:

    1. Craig Macphee & Peter Cook & Wanasin Sattayanuwat, 2013. "Transportation and The International Trade of Eastern and Southern Africa," South African Journal of Economics, Economic Society of South Africa, vol. 81(2), pages 225-239, June.
    2. Li, Zhigang & Yu, Xiaohua & Zeng, Yinchu & Holst, Rainer, 2012. "Estimating transport costs and trade barriers in China: Direct evidence from Chinese agricultural traders," China Economic Review, Elsevier, vol. 23(4), pages 1003-1010.
    3. Marcias, Manuel & Chevassus-Lozza, Emmanuelle & Latouche, Karine, 2011. "Trade and Transport Modes, A Differentiated Impact of Distance," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114370, European Association of Agricultural Economists.
    4. Murat Genç & David Law, 2014. "A Gravity Model of Barriers to Trade in New Zealand," Treasury Working Paper Series 14/05, New Zealand Treasury.
    5. Richard Pomfret & Patricia Sourdin, 2010. "Why do trade costs vary?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 146(4), pages 709-730, December.
    6. Christophe Gouel & Sébastien Jean, 2015. "Optimal Food Price Stabilization in a Small Open Developing Country," World Bank Economic Review, World Bank Group, vol. 29(1), pages 72-101.
    7. Gabriel FIGUEIREDO DE OLIVEIRA & Nicolas PERIDY, 2015. "L’Impact Des Coûts A L’Échange Sur Le Commerce Des Pays Mena: Le Rôle Des Couts Directs Et Indirects Liés Au Transport Maritime," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 41, pages 125-147.
    8. repec:eee:transa:v:110:y:2018:i:c:p:191-201 is not listed on IDEAS
    9. Inmaculada Martínez-Zarzoso & Sami Bensassi, 2013. "The Price Of Modern Maritime Piracy," Defence and Peace Economics, Taylor & Francis Journals, vol. 24(5), pages 397-418, October.
    10. Koesler, Simon & Achtnicht, Martin & Köhler, Jonathan, 2015. "Course set for a cap? A case study among ship operators on a maritime ETS," Transport Policy, Elsevier, vol. 37(C), pages 20-30.
    11. Biewald, Anne & Rolinski, Susanne & Lotze-Campen, Hermann & Schmitz, Christoph, 2011. "Implementing Bilateral Trade in a Global Landuse Model," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114251, European Association of Agricultural Economists.
    12. Patricia Sourdin & Richard Pomfret, 2012. "Trade Facilitation," Books, Edward Elgar Publishing, number 14596, April.
    13. Åsa Johansson & Eduardo Olaberría, 2014. "Long-term Patterns of Trade and Specialisation," OECD Economics Department Working Papers 1136, OECD Publishing.

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