IDEAS home Printed from https://ideas.repec.org/p/ags/aaae23/364833.html

Analysis of cassava starch market and prospects for developing a sustainable cassava value chain in South Africa

Author

Listed:
  • Nkosi, Zinhle Zandile
  • Senyolo, Mmapatla Precious
  • Belete, Abenet
  • Chaminuka, Petronella
  • Nhundu, Kenneth
  • Mazwane, Sukoluhle

Abstract

The cassava starch market in South Africa is dominated by imports and an insignificant amount of exports. This makes imports and exports a frame of reference for understanding the nature of the country’s cassava starch market. South Africa’s primary source of cassava starch is imports, making it susceptible to value chain disruptions similar to those induced by the Covid-19 pandemic. These disruptions result in the trade-inhibitory effect, which weakens the degree of trade liberalization, leading to high market access barriers and a sharp rise in trade costs. This will subsequently result in a shortage of cassava starch in South African markets. The shortage will have a direct negative impact on the food system, which is dependent on cassava starch imports, weakening its resilience and its sustainability. Thus, the study aims to analyse of cassava starch market with prospects to develop a sustainable cassava value chain in South Africa. The study used time series data from the Trade map, which was monthly imports and exports of cassava starch by volume and value. The patterns were determined using a trend analysis, which showed that cassava starch imports were significantly higher than cassava starch exports throughout the observed period. The Vector Error Correction Model (VECM) and the Impulse Response Function (IRF) were employed when testing the causality relationship between cassava starch import and export volumes and values. The results show that a long run relationship exists between cassava starch imports and exports. The (VECM) showed that when there is a deviation in cassava starch exports, 71% of the cassava starch exports are restored in the long run. The IRF showed that when there is a shock in imports the export responds by decreasing in the 1st period and stabilize in the 4th period below the general level. The study recommends that the significantly high imports should be used as a driver to develop a cassava value chain in South Africa. The country can use Thailand as a blueprint because it is a leading producer of cassava starch in the world.

Suggested Citation

  • Nkosi, Zinhle Zandile & Senyolo, Mmapatla Precious & Belete, Abenet & Chaminuka, Petronella & Nhundu, Kenneth & Mazwane, Sukoluhle, 2023. "Analysis of cassava starch market and prospects for developing a sustainable cassava value chain in South Africa," 2023 Seventh AAAE/60th AEASA Conference, September 18-21, 2023, Durban, South Africa 364833, African Association of Agricultural Economists (AAAE).
    • Handle: RePEc:ags:aaae23:364833
    DOI: 10.22004/ag.econ.364833
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/364833/files/276.%20Cassava%20in%20South%20Africa.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.364833?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Carlos Costa & Christopher Delgado, 2019. "The Cassava Value Chain in Mozambique," World Bank Publications - Reports 31754, The World Bank Group.
    2. Sims, Christopher A, 1980. "Macroeconomics and Reality," Econometrica, Econometric Society, vol. 48(1), pages 1-48, January.
    3. Hayakawa, Kazunobu & Mukunoki, Hiroshi, 2021. "The impact of COVID-19 on international trade: Evidence from the first shock," Journal of the Japanese and International Economies, Elsevier, vol. 60(C).
    4. Nipon POAPONSAKORN & Pitsom MEETHOM, 2013. "Impact of 2011 Floods, and Flood Management in Thailand," Working Papers DP-2013-34, Economic Research Institute for ASEAN and East Asia (ERIA).
    5. Costa, Carlos G. & Delgado, Christopher L., 2019. "The Cassava Value Chain in Mozambique," Jobs Group Papers, Notes, and Guides 31113790, The World Bank.
    6. Okudoh, Vincent & Trois, Cristina & Workneh, Tilahun & Schmidt, Stefan, 2014. "The potential of cassava biomass and applicable technologies for sustainable biogas production in South Africa: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 39(C), pages 1035-1052.
    7. Taiwo Peace Ogun, 2010. "Infrastructure and Poverty Reduction: Implications for Urban Development in Nigeria," WIDER Working Paper Series wp-2010-043, World Institute for Development Economic Research (UNU-WIDER).
    8. Ogun, T. P., 2010. "Infrastructure and Poverty Reduction: Implications for Urban Development in Nigeria," WIDER Working Paper Series 043, World Institute for Development Economic Research (UNU-WIDER).
    9. Jaganathan, Prakash D. & Immanuel, Sheela & Kumar, T. Krishna & Ravi, V. & Sivakumar, P. S. & Jyothi, A. N. & Kishore, Prabhat, 2021. "Production and Trade Dynamics of Cassava Starch in India," 2021 ASAE 10th International Conference (Virtual), January 11-13, Beijing, China 329409, Asian Society of Agricultural Economists (ASAE).
    10. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mohamed Traoré, 2018. "Government spending and inclusive growth in sub-Saharan Africa: A panel VAR analysis," CERDI Working papers hal-01940506, HAL.
    2. Aremo Aremo, 2014. "Trade liberalization, Economic Growth and Poverty Level in Nigeria: Vector Auto-regression (VAR) Approach (1980-2009)," Journal of Economics and Behavioral Studies, AMH International, vol. 6(7), pages 591-606.
    3. Mohamed Traoré, 2018. "Government spending and inclusive growth in sub-Saharan Africa: A panel VAR analysis," Working Papers hal-01940506, HAL.
    4. Isaiah Juma Maket & Izabella Szakálné Kano & Zsófia Boglárka Vas, 2023. "Reverse Causal Nexus between Pro‐Poor Policies and Income Inequality in Kenya," Regional Science Policy & Practice, Wiley Blackwell, vol. 15(6), pages 1163-1181, August.
    5. Hamdi, Helmi & Sbia, Rashid, 2013. "Dynamic relationships between oil revenues, government spending and economic growth in an oil-dependent economy," Economic Modelling, Elsevier, vol. 35(C), pages 118-125.
    6. Yu-Jia Ding & Pi-Chu Wu & Yu-Hui Lian, 2020. "Time Series Analysis for the Dynamic Relationship between an Enterprise’s Business Growth and Carbon Emission in Taiwan," Sustainability, MDPI, vol. 12(14), pages 1-12, July.
    7. Sayef Bakari, 2019. "Do Agricultural Raw Materials Imports Cause Agricultural Growth? Empirical Analysis from North Africa," Bulletin of Economic Theory and Analysis, BETA Journals, vol. 4(2), pages 65-77.
    8. Xu, Haifeng & Hamori, Shigeyuki, 2012. "Dynamic linkages of stock prices between the BRICs and the United States: Effects of the 2008–09 financial crisis," Journal of Asian Economics, Elsevier, vol. 23(4), pages 344-352.
    9. Panayiotis Diamandis & Georgios Kouretas, 1995. "Cointegration and market efficiency: a time series analysis of the Greek drachma," Applied Economics Letters, Taylor & Francis Journals, vol. 2(8), pages 271-277.
    10. Zheng, Li & Abbasi, Kashif Raza & Salem, Sultan & Irfan, Muhammad & Alvarado, Rafael & Lv, Kangjuan, 2022. "How technological innovation and institutional quality affect sectoral energy consumption in Pakistan? Fresh policy insights from novel econometric approach," Technological Forecasting and Social Change, Elsevier, vol. 183(C).
    11. Zia-Ur- Rahman, 2019. "Influence of Excessive Expenditure of the Government in Perspective of Interest Rate and Money Circulation Which in Turn Affects the Growing Process in Pakistan," Asian Journal of Economics and Empirical Research, Asian Online Journal Publishing Group, vol. 6(2), pages 120-129.
    12. Christopher L. Gilbert & Duo Qin, 2007. "Representation in Econometrics: A Historical Perspective," Working Papers 583, Queen Mary University of London, School of Economics and Finance.
    13. Sellin, Peter, 1998. "Monetary Policy and the Stock Market: Theory and Empirical Evidence," Working Paper Series 72, Sveriges Riksbank (Central Bank of Sweden).
    14. Jean-Baptiste Gossé & Cyriac Guillaumin, 2013. "L’apport de la représentation VAR de Christopher A. Sims à la science économique," L'Actualité Economique, Société Canadienne de Science Economique, vol. 89(4), pages 309-319.
    15. Webber, A., 1999. "Newton's Gravity Law and Import Prices in the Asia Pacific," Economics Working Papers WP99-12, School of Economics, University of Wollongong, NSW, Australia.
    16. Jawad, Muhammad & Qayyum, Abdul, 2015. "Modeling the Impact of Policy Environment on Inflows of Worker’s Remittances in Pakistan: A Multivariate Analysis," MPRA Paper 62019, University Library of Munich, Germany, revised 2015.
    17. Andreas Brunhart, 2013. "Der Klein(st)staat Liechtenstein und seine grossen Nachbarländer: Eine wachstums- und konjunkturanalytische Gegenüberstellung," Arbeitspapiere 44, Liechtenstein-Institut.
    18. Doh-Khul Kim, 2005. "Unionization, Unemployment, and Growth in Korea: A Cointegration Approach," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 33(2), pages 225-233, June.
    19. Arize, A. C., 1996. "Cointegration test of a long-run relation between the trade balance and the terms of trade in sixteen countries," The North American Journal of Economics and Finance, Elsevier, vol. 7(2), pages 203-215.
    20. Cagri Sarikaya, 2004. "Export Dynamics in Turkey," Central Bank Review, Research and Monetary Policy Department, Central Bank of the Republic of Turkey, vol. 4(2), pages 41-64.

    More about this item

    Keywords

    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:aaae23:364833. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aaaeaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.