The causal relationship between salmon prices and share prices. Price analysis on the Oslo Stock Exchange

Abstract

Atlantic salmon ((Salmo salar, Linneaus,1758)) is a commodity traded globally and salmon exports are one of the main sources of income for Norway. Despite the great growth both in supply and the demand in the last decades, there is still a substantial variability in industry profits level and an important part of such variability is due to fluctuation in salmon prices. This Master Thesis analyse whether this fluctuation is cause of the variability in share prices, for salmon producer companies listed on the Oslo Stock Exchange (OSE) ,or by the contrary, if the fluctuation in share prices influences the salmon price oscillations. The companies analyzed were Marine harvest, Lerøy, Salmar and Cermaq, and the causal direction were tested using the Granger causality test. Overall, test results indicate that share prices have influence on salmon prices for Salmar, Marine Harvest and Lerøy. However, there is no a clear influence in the case of Cermaq. Analysing the other direction of causality, the salmon prices only influence the share prices for Salmar and Lerøy, but Marine Harvest and Cermaq are not affected by the salmon prices.