Kazutaka Takechi, 05 February 2017

The trade patterns of agricultural products, which are traded inter-regionally on a daily basis, are quite volatile, with trade often not taking place at all. Using daily data on the carrot trade in Japan, this column shows how supply and demand shocks and trade costs can cause frequent changes in supply patterns. Policies to reduce fixed trade costs, such as improving inventory management or traffic control, are needed even in a country with sufficient transport infrastructure such as Japan.

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