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The Maize Price Spike of 2012/13: Understanding the Paradox of High Prices despite Abundant Supplies

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  • Sitko, Nicholas J.
  • Kuteya, Auckland N.

Abstract

The 2012 harvest was, according to the Ministry of Agriculture and Livestock national food balance sheet estimates, a major surplus production season. However, by November the same year, Zambia started experiencing widespread maize meal shortages and skyrocketing maize meal prices. Responding to these shortages and price spikes, the government increased the price subsidies it provided on maize sold by the parastatal Food Reserve Agency (FRA) to large-scale maize mills and imposed de facto price controls on maize meal by threatening to revoke the business licenses of commercial maize mills if retail prices of a 25kg bag of maize meal exceeded kwacha rebased (KR) 50. Despite these efforts maize meal prices continued to rise, reaching as high as KR100 in some markets by February 2013.

Suggested Citation

  • Sitko, Nicholas J. & Kuteya, Auckland N., 2013. "The Maize Price Spike of 2012/13: Understanding the Paradox of High Prices despite Abundant Supplies," Food Security Collaborative Working Papers 171871, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    • Handle: RePEc:ags:midcwp:171871
    DOI: 10.22004/ag.econ.171871
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    References listed on IDEAS

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    9. Sitko, Nicholas J. & Jayne, T.S., 2014. "Exploitative Briefcase Businessmen, Parasites, and Other Myths and Legends: Assembly Traders and the Performance of Maize Markets in Eastern and Southern Africa," World Development, Elsevier, vol. 54(C), pages 56-67.
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    11. Jayne, Thomas S. & Mason, Nicole M. & Myers, Robert J. & Ferris, John N. & Mather, David & Sitko, Nicholas & Beaver, Margaret & Lenski, Natalie & Chapoto, Antony & Boughton, Duncan, 2010. "Patterns and Trends in Food Staples Markets in Eastern and Southern Africa: Toward the Identification of Priority Investments and Strategies for Developing Markets and Promoting Smallholder Productivi," Food Security International Development Working Papers 62148, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    12. Chapoto, Antony & Jayne, Thomas S., 2009. "The Impacts of Trade Barriers and Market Interventions on Maize Price Predictability: Evidence from Eastern and Southern Africa," Food Security International Development Working Papers 56798, Michigan State University, Department of Agricultural, Food, and Resource Economics.
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    1. Kuteya, Auckland N. & Sitko, Nicholas J., 2014. "Creating Scarcity From Abundance: Bumper Harvests, High Prices, And The Role Of State Interventions In Zambian Maize Markets," Food Security Collaborative Policy Briefs 171877, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    2. Chapoto, Antony & Chisanga, Brian & Kuteya, Auckland & Kabwe, Stephen, 2015. "Bumper Harvests a Curse or a Blessing for Zambia: Lessons from the 2014/15 Maize Marketing Season," Food Security Collaborative Working Papers 202881, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    3. Nicholas Sitko & Jordan Chamberlin, 2015. "The Anatomy of Medium-Scale Farm Growth in Zambia: What Are the Implications for the Future of Smallholder Agriculture?," Land, MDPI, vol. 4(3), pages 1-19, September.
    4. Sitko, Nicholas J. & Chisanga, Brian, 2016. "How Is Multinational Investment in Grain and Oilseed Trading Reshaping the Smallholder Markets in Zambia?," Food Security Collaborative Working Papers 234948, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    5. Sitko, Nicholas J. & Chamberlin, Jordan & Mulenga, Brian, 2015. "Unpacking the Growth of Medium-scale Farms Zambia: What Are the Implications for the Future of Smallholder Agriculture?," Food Security Collaborative Working Papers 212901, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    6. Fung, Winnie & Liverpool-Tasie, Saweda & Mason, Nicole & Oyelere, Ruth, 2015. "Can Crop Purchase Programs Reduce Poverty and Improve Welfare in Rural Communities? Evidence from the Food Reserve Agency in Zambia," 2015 Conference, August 9-14, 2015, Milan, Italy 211637, International Association of Agricultural Economists.

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    Keywords

    Agricultural and Food Policy; Demand and Price Analysis; Food Security and Poverty;
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