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HONEY MARKET ANALYSISFRE 502
AMBER
CHEN ZHUO
VICTOR
AGENDA OF PRESENTATION
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
INTRODUCTION
AGENDA OF PRESENTATION
WORLD HONEY PRODUCTION
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 20101000000
1100000
1200000
1300000
1400000
1500000
1600000
natural honey world production
time (year)
tota
l w
orl
d p
rod
uct
ion
(to
nn
es)
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010300
350
400
450
500
world honey yield
time (year)
yiel
d (
Hg
/bee
hiv
e)
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)
The current value of world honey production represents the market value of honey at the time they were produced.
TOTAL PRODUCTION VALUE
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 20100
1000
2000
3000
4000
5000
6000
World Gross Production Value
Time (year)
Cu
rren
t m
illi
on
US
$
World Gross Production Value (million US$)/Total World Production (tonnes)
= Unit Value of honey ($/tonne)
PRODUCTION PRICE
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 20100
500
1000
1500
2000
2500
3000
3500
4000
honey price at production level
time (year)
un
it v
alu
e ($
/to
nn
e)
•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
PRODUCTION PRICE
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 20100
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
production price movements
time (year)
curr
ent
pri
ce s
erie
s/co
nst
ant
pri
ce
seri
es
HONEY EXPORT AND IMPORT PRICES
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 20100.00
500.00
1000.00
1500.00
2000.00
2500.00
3000.00
3500.00
Export and Import Prices
import price
export price
time (year)
wo
rld
pri
ce (
$/to
nn
e)
Highly coherent export and import price trends => An excellent real world example of the three panel diagram!
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
Russia Federation 51535 Brazil 18629 Indonesia 15595
Total World Production
1540242Total World
Export 482149 Total World Import
494445
% Production
Traded
482149/1540242=31%
Top 8 Exporters 61% Top 8
Importers72%
•Around 30% world production traded (quite thick) and the trend is fairly stable
STRUCTURE OF HONEY MARKET
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 20100%
5%
10%
15%
20%
25%
30%
35%
time
% h
on
ey w
orl
d p
rod
uct
ion
tra
ded
• 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
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 20100.00
500.00
1000.00
1500.00
2000.00
2500.00
3000.00
3500.00
Import Prices
"EU"
"US"
"Japan"
time (year)
$/to
nn
e
1990-2002: the three importers’ price movements are quite synchronized.2002-2004: EU price > US price > Japan price2005-2010: EU price > US and Japan price
Implication: EU imports higher quality honey across the years and this is getting very obvious in recent years.
•CR3 is relatively stable and flat across the years.
•High degree of concentration of around 80%.
HONEY IMPORTERS
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 20100%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Concentration Ratio of the 3 importers
time (year)
HONEY EXPORTERS
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 20100.00
500.00
1000.00
1500.00
2000.00
2500.00
3000.00
3500.00
Export Prices
China
Argentina
Mexico
time (year)
$/to
nn
e
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.
•CR3 is showing a gentle decreasing trend across the years from 60% in 1990 to 40% in 2010
HONEY EXPORTERS
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 20100%
10%
20%
30%
40%
50%
60%
70%
Concentration Ratio of the 3 Exporters
time (year)
•Revealed Comparative Advantage Index:
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
€
RCAij =X ij / X it
Xwj / Xwt
•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.
A COMPARISON OF THE 3 HONEY EXPORTERS
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 20100.00
10.00
20.00
30.00
40.00
50.00
60.00
Revealed Comparative Advantage of Honey Exporters
China
Argentina
Mexico
time (year)
ZOOMING INTO CHINA
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 20100.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
China's Revealed Comparative Advantage
time (year)
US anti-dumping policy
EU ban on China honey export
AGENDA OF PRESENTATION
EU Consumption from 1990~2010.
Source: FAO
• World Principle Importer of Honey.
• Long history of consume honey as a healthy food.
• Continuous Growth
SPECIAL ISSUES 1
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 -
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
EU Import Value
Years
Imp
ort
Va
lue
$1
00
0
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
Opportunities and Threats:
• 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
1985 1990 1995 2000 2005 2010 20150
100002000030000400005000060000700008000090000
100000
Germany VS EU Import Quantity
Years
Imp
rot
Qu
an
tity
To
nn
es
Source: FAO
SPECIAL ISSUES 1
Source: CBI Market Survey
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
SPECIAL ISSUES 2
Sa
Da
ES
Db
Sb
ED1
P1
China US World Market
Q1
Tariff Imposed in US: World P drops from P1 to P2 (in export country); Price rises to P3 in import country; P3 - P2 = tariff
ED2
P2P2
P3
a bdc
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.
SPECIAL ISSUES 2
Syrup:A thick, viscous liquid consisting a large amount of sugar.
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/1953
SPECIAL ISSUES 2
Alfred L Wolff Gmbh (ALW).Ltd.
(offices in Hamburg, Chicago, Beijing and Hong Kong)
Originating in South Korea to avoid U.S. anti-dumping duties. 2-Years Sentence. --------US.ICE
Source: http://www.ice.gov/news/releases/1206/120626chicago.htm
SPECIAL ISSUES 2
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 20100
5000
10000
15000
20000
25000
22649
India Export Quantity
Year
Ho
ne
y Q
ua
nti
ty T
on
s
AGENDA OF PRESENTATION
US HONEY MARKET
Source: http://outdoorplace.org/beekeeping/honey1.htm
Outline:
Characters of US honey market
Policy analysis- honey program
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
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20100
20000
40000
60000
80000
100000
120000
140000
160000
180000
200000
US total consumption
production import
year
pro
du
ctio
n (
k to
nn
es)
Data from: FAO
US MARKET-INTEGRATED PRICE
Data from: FAO
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20100
500
1000
1500
2000
2500
3000
3500
Price Integration of US Honey
US produce price
world import price
year
cen
ts/l
b
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.
Outline:
•Origin
•Development
•Recent policy analysis
US HONEY PROGRAM(1952-?)
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.
.
US HONEY PROGRAM
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 PROGRAM-DEVELOPMENT
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 PROGRAM-DEVELOPMENT
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?
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
0
20000
40000
60000
80000
100000
120000US Honey production
US Honey production
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)
EFFECTIVE?
AGENDA OF PRESENTATION
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.
CONCLUSION
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.
REFERENCE
