Oilseed Trade Flows: A Gravity Model Approach to Transportation Impacts

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.

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Journal of Food Distribution Research, 43, 1
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 Record created 2017-04-01, last modified 2020-10-28

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