DELINEATION OF FINNISH FISH MARKETS: INTERACTIONS BETWEEN WILD AND FARMED

Finnish fish markets have traditionally been supplied by domestic wild fish species: Baltic herring, salmon and several freshwater species. Nowadays, farmed salmon and rainbow trout dominate the market and wild-caught species are moving to niche product segment. In this paper we examine the market integration of Finnish fish markets. We apply multivariate vector autoregressive (VAR) model to study interactions between farmed rainbow trout and wild caught European whitefish, pikeperch, perch and salmon. We found two cointegrated relations in the system. Firstly, European whitefish, pikeperch, and perch are close substitutes to each other. Secondly, we observed co-integration between wild-caught species and farmed rainbow trout. We also modelled the system in moving average form and identified three common stochastic trends, which drive the system. Two of these originate from wild fish species and one comes from farmed rainbow trout. This implies that in the Finnish market wild fish species compete with each other and the prices of these species are affected by farmed fish