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.
