World Forage Import Market: Competitive Structure and Market Forces

Abstract

Trade market power serves as a significant indicator of pricing power within the trade market. This paper aims to examine the market structure of global forage trade from 1997 to 2020 and assess the market power of forage exporters in major importing countries, namely Japan, China, and South Korea, by utilizing an extended G-K model based on the theory of residual elasticity of demand. The findings of this analysis provide several key insights. Firstly, it is revealed that the United States and Australia hold a monopoly on forage trade, while China has emerged as the most pivotal market for worldwide forage trade. Notably, China’s growing demand for forage imports is profoundly influencing the global forage trade landscape. Secondly, the extent and effectiveness of exporting countries’ market power in forage-importing nations, such as China, varies considerably. Lastly, the market power of forage-exporting countries is determined by various factors, including the demand for forage in importing nations, export monopoly, import structure, demand elasticity, and the level of marketization.