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Spatial and Temporal Maize Price Analysis in East Africa

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  • Gbegbelegbe, Sika
  • De Groote, Hugo

Abstract

Maize is the major food crop and an important cash crop in East Africa, but yields have not increased in the last years. Maize prices fluctuate heavily both over time, causing price insecurity which hampers investment decisions, and over space which, combined with limited knowledge of that fluctuation, reduces opportunities to market surplus. In this paper, temporal and spatial price volatility is analyzed, based on monthly maize prices from various markets in East Africa, including 28 markets in Kenya. The hypothesis that the market liberalization of the 1990s increased efficiency and decreased volatility in Kenya is also tested. Preliminary results for Kenyan markets show a clear negative trend, indicating that real maize prices have decreased over time, on average 4% per year. Major factors in price variation are the differences between years, although a distinct one-season effect is demonstrated. Prices are clearly higher in the surplus zone during the high season, but lower otherwise. The coast has higher prices in the lower season. Generally, it can be concluded that price volatility has been decreasing over the years. The liberalization, most likely, has played a positive effect on this trend.

Suggested Citation

  • Gbegbelegbe, Sika & De Groote, Hugo, 2012. "Spatial and Temporal Maize Price Analysis in East Africa," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126844, International Association of Agricultural Economists.
  • Handle: RePEc:ags:iaae12:126844
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    File URL: http://ageconsearch.umn.edu/record/126844/files/EA-Maize-Prices-July2012.pdf
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    References listed on IDEAS

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    1. Tripp, Robert & Rohrbach, David, 2001. "Policies for African seed enterprise development," Food Policy, Elsevier, vol. 26(2), pages 147-161, April.
    2. Randy Stringer & Prabhu Pingali, 2004. "Agriculture's Contributions to Economic and Social Development," The Electronic Journal of Agricultural and Development Economics, Food and Agriculture Organization of the United Nations, vol. 1(1), pages 1-5.
    3. Crawford, Eric & Kelly, Valerie & Jayne, T. S. & Howard, Julie, 2003. "Input use and market development in Sub-Saharan Africa: an overview," Food Policy, Elsevier, vol. 28(4), pages 277-292, August.
    4. Tripp, Robert, 2001. "Can biotechnology reach the poor? The adequacy of information and seed delivery," Food Policy, Elsevier, vol. 26(3), pages 249-264, June.
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    Cited by:

    1. Nzuma, Jonathan M. & Karugia, T.J. & Wanjiku, J. & Wambua, J. & Kirui, Oliver K., 2013. "Staple Food Price Volatility and Its Policy Implications in Kenya," 2013 Fourth International Conference, September 22-25, 2013, Hammamet, Tunisia 161525, African Association of Agricultural Economists (AAAE).
    2. Gitonga, Zachary M. & De Groote, Hugo & Kassie, Menale & Tefera, Tadele, 2013. "Impact of metal silos on households’ maize storage, storage losses and food security: An application of a propensity score matching," Food Policy, Elsevier, vol. 43(C), pages 44-55.

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    Keywords

    Demand and Price Analysis;

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