The Price of Salmon in Japan
Have you ever heard of the catch phrase, “What does that have to do with the price of tea in China”. Most people probably are familiar with that phrase as a way of telling a person that the point they are making doesn’t have much to do with the main topic of the discussion. Some think the phrase originated from economists who “describe everything economic as affecting everything else.” This week’s discussion topic may not be about the price of tea in China but instead may I lead in my response to this week’s discussion topic with some background concerning the price of fresh salmon in Japan? In the 1980’s, the price of fresh salmon in Japan was around 1,600 yen/kilogram. 98% of Japan’s supply of fresh salmon in the 80’s was from wild sources. By 2001, 62% of the Japanese demand for salmon was being supplied from aquaculture or salmon farms. The significant increase in supply of aquaculture salmon from all parts of the world affected the price for fresh salmon just as our text explains. As the supply of fresh salmon increased the price for the salmon decreased. By 2003 the price for fresh salmon in Japan had decreased to 500 yen/kilogram. According to a study put out by the University of Alaska, “Historically there has been an inverse relationship between total Japanese imports of frozen “red-fleshed” salmon and average annual sockeye wholesale prices received by importers. Prices have generally fallen when total imports have risen, and vice versa, resulting in a “mirror-image” relationship between total imports and average annual sockeye prices.”
Using my “price of salmon in Japan” example as a backdrop, I would then forecast the change in the price of salmon in our case study to decrease over the next three years. The forecast for increased supply of farmed salmon from “substantial plans to expand production” will cause the price of salmon to decrease. This increased competition in the market will be good for the consumer by bringing about lower prices, but
Using my “price of salmon in Japan” example as a backdrop, I would then forecast the change in the price of salmon in our case study to decrease over the next three years. The forecast for increased supply of farmed salmon from “substantial plans to expand production” will cause the price of salmon to decrease. This increased competition in the market will be good for the consumer by bringing about lower prices, but