Aquaculture and fisheries industries plays a major role in overall exports from Norway, the world’s second largest exporter of seafood. The industry has a global reach as there exist several destination markets and exporters for seafood, indicating a substantial heterogeneity in the industry.
It is widely assumed that a country’s export can be stimulated through a depreciation of the domestic currency, but while the actual response of exports to exchange rate movements has been debated for decades, the current evidence is mixed. How trade actually responds to changes in exchange rates varies widely across products, trade orientation and choice of invoicing currency. In this paper we investigate exchange rate pass-through (ERPT) into destination prices for Norwegian Aquaculture exports. Following the literature of international trade, ERPT is assumed to be incomplete when exports are invoiced in a foreign currency. An examination of how exporters of aquaculture products responds to exchange rate variation, and if the response differs between different invoicing currencies, are of interest as the literature considers such products are as homogeneous products and the estimated trade response can then be considered as a direct effect of exchange rate movements.
In this paper we employ Customs data for Norwegian exports of seafood. Each observation is recorded with an anonymous ID for the exporter, the statistical value and weight of the shipment, date of the shipment, destination country and invoicing currency. Data on invoicing currency and destination country makes it possible to measure ERPT for seafood exports at the product level.
The results indicate a strong prevalence of ERPT in Norwegian seafood exports invoiced in producer currency. The effect appears to be different for exporters of aquaculture products than for exporters of products from traditional fisheries. Pass-through for exporters of aquaculture products are sensitive to marked shares and export orientation.