Analysis of oilseed trade patterns and transportation costs
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The aim of this paper is to build a comprehensive trade framework of oilseeds and oilseeds oil. The impacts of transportation costs and policy changes on oilseeds and derived oils are estimated using gravity models. We describe and analyze export and import markets of oilseeds and derived vegetable oils. Trade of the oilseeds is relatively unrestricted by tariffs and other border measures, but oilseed meals, and particularly vegetable oils, have had higher tariffs. In addition to tariffs, both exporters and importers have used other trade-distorting policies. A naïve gravity model and McCallum gravity model are applied on the analysis of oilseed trade. A Baier and Berstrand method, using a Taylor-series expansion, reveals a theoretical relationship between incomes, trade flows and trade costs by a reduced-form gravity equation, Distance between two countries and border trade barriers have significant impacts on the trade value of oilseeds.