Honey Market Analysis

Report
HONEY MARKET ANALYSIS
FRE 502
AMBER
CHEN ZHUO
VICTOR
AGENDA OF PRESENTATION
Introduction
World Market
Special Issues
US Honey Market
Conclusion
INTRODUCTION
History of Honey:
•
•
•
At least 8,000 years ago.
Culture: European & Asia.
1851, Lorenzo Langstroth
(Father of modern apiculture)

Produce Procedure
http://honeylore.com
By Product: Beeswax
INTRODUCTION
Consumer Behavior:
Arvanitoyannis and Krystallis (2006)
•Medical benefits;
•Dietary quality;
•Ethical character of honey;
•Lifestyle.
INTRODUCTION
Usage of Honey:
• Honey for direct consumption
• Honey as an ingredient in products
• Industrial honey
• Raw material for Mead ( Honey Wine)
INTRODUCTION
Main Exporters: China, Argentina, Mexico.
Main Importers: US, EU, Japan.
Current Threat: Collapse Colony Disorder
 Remained stable 1990s
at 17%-20%.
 2007~2010 34% loss
AGENDA OF PRESENTATION
Introduction
World Market
Special Issues
US Honey Market
Conclusion
WORLD HONEY PRODUCTION
total world production (tonnes)
natural honey world production
1600000
1500000
1400000
1300000
1200000
1100000
1000000
1990
1992
1994
1996
1998
2000
time (year)
2002
2004
2006
2008
2010
yield (Hg/beehive)
world honey yield
500
480
460
440
420
400
380
360
340
320
300
1990
1992
1994
1996
1998
2000
time (year)
2002
2004
2006
2008
Production increased but yield per beehive remained fairly constant suggests that the
number of beehives increased across the years.
R&D may NOT play a role in increasing the amount of honey per beehive (upper limit)
2010
TOTAL PRODUCTION VALUE
The current value of world honey production represents the market value
of honey at the time they were produced.
World Gross Production Value
6000
Current million US$
5000
4000
3000
2000
1000
0
1990
1992
1994
1996
1998
2000
Time (year)
2002
2004
2006
2008
2010
PRODUCTION PRICE
World Gross Production Value (million US$)/Total World Production
(tonnes)
= Unit Value of honey ($/tonne)
honey price at production level
4000
unit value ($/tonne)
3500
3000
2500
2000
1500
1000
500
0
1990
1992
1994
1996
1998
2000
time (year)
2002
2004
2006
2008
2010
PRODUCTION PRICE
•Another way to examine price movements: the ratio of current value of
honey production (million US$) and value of honey production in constant
terms is calculated (constant 2004-2006 million US$).
•Current value => Price measure
•Constant value => Volume measure
current price series/constant price
series
production price movements
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
1990
1992
1994
1996
1998
2000
time (year)
2002
2004
2006
2008
2010
HONEY EXPORT AND
IMPORT PRICES
Export and Import Prices
3500.00
3000.00
world price ($/tonne)
2500.00
2000.00
import price
1500.00
export price
1000.00
500.00
0.00
1990
1992
1994
1996
1998
2000
time (year)
2002
2004
2006
2008
Highly coherent export and import price trends
=> An excellent real world example of the three panel diagram!
2010
STRUCTURE OF HONEY
MARKET, 2010
Major
Producers
Tonnes
Major
Exporters
Tonnes
Major
Importers
Tonnes
China
398000
China
103716
US
114128
Turkey
81115
Argentina
57317
Germany
89548
US
79789
Mexico
26512
Japan
39950
Ukraine
70900
India
22649
UK
31515
Argentina
59000
Vietnam
22544
France
25394
Mexico
55684
Spain
21756
Belgium
22096
Ethiopia
53675
Germany
20527
Spain
17712
51535
Brazil
18629
Indonesia
15595
1540242
Total World
Export
482149
Total World
Import
494445
Top 8
Exporters
61%
Top 8
Importers
72%
Russia
Federation
Total World
Production
%
Production
Traded
482149/1540242
=31%
STRUCTURE OF HONEY
MARKET
% honey world production traded
•Around 30% world production traded (quite thick) and the trend is
fairly stable
35%
30%
25%
20%
15%
10%
5%
0%
1990
1992
1994
1996
1998
2000
time
2002
2004
2006
2008
2010
•Big producers are also big traders (implies that the market is
concentrated and more stable)
•High X concentration and high M concentration
•China is the top producer and the top exporter. However, US is a both a
dominant producer and the top importer.
HONEY IMPORTERS
Import Prices
3500.00
3000.00
$/tonne
2500.00
2000.00
"EU"
"US"
1500.00
"Japan"
1000.00
500.00
0.00
1990
1992
1994
1996
1998
2000
time (year)
2002
2004
2006
2008
2010
1990-2002: the three importers’ price movements are quite synchronized.
2002-2004: EU price > US price > Japan price
2005-2010: EU price > US and Japan price
Implication: EU imports higher quality honey across the years and this is
getting very obvious in recent years.
HONEY IMPORTERS
•CR3 is relatively stable and flat across the years.
•High degree of concentration of around 80%.
Concentration Ratio of the 3 importers
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
1990
1992
1994
1996
1998
2000
time (year)
2002
2004
2006
2008
2010
HONEY EXPORTERS
Export Prices
3500.00
3000.00
$/tonne
2500.00
2000.00
China
Argentina
1500.00
Mexico
1000.00
500.00
0.00
1990
1992
1994
1996
1998
2000
time (year)
2002
2004
2006
2008
1990-2000: the three exporters’ price movements are quite similar.
2000-2010: Argentina and Mexico prices > China price
(Gap widened in the last three years)
Implication: China is either exporting lower quality honey or is having
comparative advantage due to price competitiveness.
2010
HONEY EXPORTERS
•CR3 is showing a gentle decreasing trend across the years from 60% in
1990 to 40% in 2010
Concentration Ratio of the 3 Exporters
70%
60%
50%
40%
30%
20%
10%
0%
1990
1992
1994
1996
1998
2000
time (year)
2002
2004
2006
2008
2010
A COMPARISON OF THE 3
HONEY EXPORTERS
•Revealed Comparative Advantage Index:
RCAij 
X ij / X it
X wj / X wt
Xij: Export Country’s Honey Export Value
Xit: Export Country’s Total Merchandise Export Value
Xwj: World’s Honey Export Value
Xwt: World’s Total Merchandise Export Value
•As long as RCA>1, the honey exporter has revealed comparative advantage.
•The bigger the value of RCA, the stronger the comparative advantage
internationally.
A COMPARISON OF THE 3
HONEY EXPORTERS
Revealed Comparative Advantage of Honey Exporters
60.00
50.00
40.00
China
30.00
Argentina
Mexico
20.00
10.00
0.00
1990
1992
1994
1996
1998
2000
time (year)
2002
2004
2006
2008
2010
•Argentina’s RCA index is notably higher than Mexico and China’s RCA
index.
•Both Mexico and China have a decreasing trend over the years.
ZOOMING INTO CHINA
China's Revealed Comparative Advantage
7.00
US anti-dumping policy
6.00
5.00
4.00
EU ban on China honey export
3.00
2.00
1.00
0.00
1990
1992
1994
1996
1998
2000
time (year)
2002
2004
2006
2008
2010
AGENDA OF PRESENTATION
Introduction
World Market
Special Issues
US Honey Market
Conclusion
SPECIAL ISSUES 1
EU Consumption from 1990~2010.
EU Import Value
900,000
Import Value $1000
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
-
1990
1992
1994
1996
1998
2000
2002
2004
Years
• World Principle Importer of Honey.
• Long history of consume honey as a healthy food.
• Continuous Growth
2006
2008
2010
Source: FAO
SPECIAL ISSUES 1
EU:
•
Higher Consumer Surplus.
•
High-Standard Product.
•
Organic and Fair-trade Honey.
A. In 2002, EU banned the honey from China.
--- Banned Antibiotic material
B. In 2007, EU banned the honey from Brazil.
--- No Agreement on Testing procedure and Standard
C. China lost Market Share.
-----Argentina, Mexico, Chile, Brazil Take over.
SPECIAL ISSUES 1
Improt Quantity Tonnes
Germany VS EU Import Quantity
100000
90000
80000
70000
60000
50000
40000
30000
20000
10000
0
1985
1990
1995
2000
Years
Opportunities and Threats:
2005
2010
2015
Source: FAO
• Organic honey & Fair trade honey
(UK In 2004 organic honey, 6.8%, 28% increase previous year)
• CCD (Collapse Colony Disorder) -----Unknown, No Solution.
• Strong EURO
SPECIAL ISSUES 1
Source: CBI Market Survey
SPECIAL ISSUES 2
Anti-dumping Duty:

In 1992, US , anti-dumping duty, China Honey.

Revoked at 2000. (157% Preliminary anti-dumping duty)
 Put an anti-dumping . Again. In 2001.
Chinese Companies Appeal.
Final  183% antidumping
SPECIAL ISSUES 2
Sb
ES
Sa
P2
P2
P3
P1
ED1
a c
Q1
db
China
Db
ED2
Da
World Market
Tariff Imposed in US: World
P drops from P1 to P2 (in
export country); Price rises to P3 in import
country; P3 - P2 = tariff
US
SPECIAL ISSUES 2
China Honey Market Share in US
SPECIAL ISSUES 2
Reasons One :
•Honey-Rice Syrup Mixture from China.
------2012, August 21, the U.S. Department of Commerce.
 Final anti-circumvention ruling on Chinese honey states honey-rice
syrup circumvented the U.S. antidumping duty order.
Syrup:
A thick, viscous liquid
consisting a large amount
of sugar.
SPECIAL ISSUES 2
Reason Two:
China Honey Re-Route:
 To Avoid Anti-dumping
duty.
3 Steps of Trading:
• Export to another
company.
• Re-label honey, Change
country of origin.
• Companies in USA
import it.
Source:
www.downtoearth.org.in/node/195
3
SPECIAL ISSUES 2
Alfred L Wolff Gmbh (ALW).Ltd.
(offices in Hamburg, Chicago, Beijing and Hong Kong)
India Export Quantity
Honey Quantity Tons
25000
2010, 22649
20000
15000
10000
5000
0
1990
1995
2000
Year
2005
 Originating in South Korea to avoid U.S. anti-dumping duties.
Sentence. --------US.ICE
2010
2-Years
Source: http://www.ice.gov/news/releases/1206/120626chicago.htm
AGENDA OF PRESENTATION
Introduction
World Market
Special Issues
US Honey Market
Conclusion
US HONEY MARKET
Outline:
Characters of
US honey
market
Policy
analysis- honey
program
Source: http://outdoorplace.org/beekeeping/honey1.htm
US MARKET-DECREASING PRODUCTION
LD
WARD, R., BOYNTON, B.. U.S. Honey Supply Chain: Structural Change, Promotions and the China Connection. International
Journal on Food System Dynamics, North America, 1, jan. 2010. Available at: http://131.220.45.179/ojs/index.php/fsd/article/view/6.
Date accessed: 20 Nov. 2012.
US MARKET-INCREASING CONSUMPTION
US total consumption
production
import
200000
180000
production (k tonnes)
160000
140000
120000
100000
80000
60000
40000
20000
0
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
year
Data from: FAO
US MARKET-INTEGRATED PRICE
Price Integration of US Honey
3500
3000
cents/lb
2500
2000
US produce price
1500
world import price
1000
500
0
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
year
Data from: FAO
OVERVIEW OF THE TREND
Canada, Carol. Farm Commodity Programs: Honey. Washington D.C., USA . UNT Digital Library.
http://digital.library.unt.edu/ark:/67531/metacrs8892/. Accessed November 19, 2012.
US HONEY PROGRAM
(1952-?)
Outline:
•Origin
•Development
•Recent policy analysis
US HONEY PROGRAM
Origin:
During world war 2:
• honey was produced as a nation priority(substitution for sugar)
•beeswax for military use
•>>>demand high, price high
After the second world war:
• demand for honey largely decrease
•Substitution: sugar, largely available
•>>>>demand declines, price largely decrease.
.
Figure retrieve from:Canada, Carol. Farm Commodity Programs: Honey. Washington D.C., USA . UNT
Digital Library. http://digital.library.unt.edu/ark:/67531/metacrs8892/. Accessed November 19, 2012.
HONEY PROGRAMDEVELOPMENT
year
Program
1952-1980
Non-recourse loan
1980-1985
Non-recourse loan( higher support
price)
1985-1993
Non recourse marketing loan
(lower support price, lower
repayment )& deficiency payment
1994-1998
None
1998-2002
Recourse loan
2002-2012
Non-recourse Market assistance
loan& loan deficiency payment
THREE DIFFERENT PRICE
SUPPORT POLICY
HONEY PROGRAMDEVELOPMENT
year
Program
1952-1980
Non-recourse loan
1980-1985
Non-recourse loan( higher support
price)
1985-1993
Non recourse marketing loan
(lower support price, lower
repayment )& loan deficiency
payment
1994-1998
None
1998-2000
Recourse loan
2000-2012
Non-recourse Market assistance
loan& loan deficiency payment
EFFECTIVE?
120000
US Honey production
100000
80000
60000
US Honey production
40000
20000
0
EFFECTIVE?
The production is still declining, effect can’t be observed
Factors:
•World price higher than produce price (fund available)
•CCD is still under no control ( still can’t find reason,there are several
reason, but not convincing)
•Imported honey
Why:
Pollination is important for all corps, not only the economic value of
honey. (also professional beekeepers income source)
AGENDA OF PRESENTATION
Introduction
World Market
Special Issues
US Honey Market
Conclusion
CONCLUSION
World Market of Honey:
 The competitive advantages of China, Argentina, Mexico.
 The market trend of honey.
Special Issues:
 EU Premium in Honey Market.
 CCD
 Anti-dumping duty of China Honey.
US Honey Market:
 US Policy Support.
REFERENCE
WARD, R., BOYNTON, B.. U.S. Honey Supply Chain: Structural Change,
Promotions and the China Connection. International Journal on Food System
Dynamics, North America, 1, jan. 2010. Available at:
http://131.220.45.179/ojs/index.php/fsd/article/view/6. Date accessed: 20 Nov.
2012.
Canada, Carol. Farm Commodity Programs: Honey. Washington D.C., USA .
UNT Digital Library. http://digital.library.unt.edu/ark:/67531/metacrs8892/.
Accessed November 19, 2012.

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