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Abstract
Oilseeds and oilseed products are vital commodities in international trade, and production has
been rapidly expanded in recent years under the yield growth and demand characteristics linked
to more income-elastic products. Of the global production for major oilseeds, which reached
395.2 million metric tons in 2009, three major producers – the United States, Brazil and China –
account for almost 50 percent. This paper develops a broad trade framework to estimate the impacts
of transportation costs on international oilseeds trade using gravity models. We describe
export and import markets of oilseeds and derived vegetable oils. A Baier and Berstrand gravity
model method (2009), using a Taylor-series expansion, reveals a theoretical relationship between
incomes, trade flows and trading costs through a reduced-form gravity specification. Distance
between two countries and border trade barriers have significant and substantive impacts on the
trade value of oilseeds and oilseeds oils.