Download to read offline
More Related Content
Similar to Agricultural Merchandise Trade Outcomes
Agricultural Merchandise Trade Outcomes
- 1. Agricultural Merchandise Trade Outcomes TheCase of Malawi’s Maize, Soybeans and Groundnut Product Trade (1999 – 2013) J. Govereh, G. Matchaya & P. Chilonda
- 2. Outline • Trade targets •Product classification and Malawi’s tradeables • Orientation, growth and openness of trade • Product and geographic diversity • Partners and survival of trade relationships • Summary and limitations • Conclusions
- 3. Malawi/SADC RISDP targets •SADC Target is – diversification of industrial structure & exports • Sophisticated higher value products (growth in tech) – more emphasis on value addition • Increase intra-industry trade (fragmented production) • Under RISDP targets are: – Export diversification • increase of non-traditional exports – Sustain export growth rate of at least 5% annually – Increasing intra-regional trade to at least 35%
- 4. UN General TradeSystem • UN COMTRADE (http://comtrade.un.org). • Primary products – raw materials & resources used in productive processes • Intermediate products – semi-finished goods used in production of other goods • Consumer products – goods traded for final consumption • Capital goods – manufacturing goods used in production of other goods.
- 5. Malawi Tradeable Products Productclasses Sub-sectors Maize Groundnuts Soybean Primary Grain Shelled/unshelled Bean Intermediate Bran Crude oil Final Flour Refined oil Capital Seed
- 6. Orientation and Growthof Trade -90.0 -70.0 -50.0 -30.0 -10.0 10.0 30.0 50.0 70.0 90.0 110.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 USDMillions Size of Maize Trade Flows in Malawi Imports Exports Balance -35.0 -30.0 -25.0 -20.0 -15.0 -10.0 -5.0 0.0 5.0 10.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 USDMillions Size of Soybean Trade Flows in Malawi Imports Exports Balance -10.0 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 USDMillions Size of Groundnut Trade Flows in Malawi Imports Exports Balance (10) (5) - 5 10 15 20 Maize Soybean Groundnuts Maize Soybean Groundnuts SADCMalawi Growth (%/yr) Averageannualgrowth in TradeMalawi vs SADC Exports Imports
- 7. Growth in valuevs growth in weight -10 -5 0 5 10 15 20 25 Imports Exports Imports Exports Imports Exports Imports Exports Imports Exports Maize Seed Maize Grain Soybean Refined Soybean Crude Groundnut Shelled Growth(%/yr) Weight Value
- 8.
- 9. HS6 Product ConcentrationIndex 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 Imports Exports Imports Exports Imports Exports Maize Groundnuts Soybean ConcentrationIndex
- 10. Diversification by stageof production - 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 100.0 Import Export Import Export Import Export Groundnut Soybean Maize PerCent(%) Primary Intermediate Final Capital
- 11. Diversity of TradingPartners 0 2 4 6 8 10 12 No.ofPartners Diversity of Import Trading Partners Maize seed Maize Grain Maize Flour 0 2 4 6 8 10 12 No.OfPartners Diversity of Import Trading Partners Groundnuts shelled Soybean Crude Oil Soybean Refined Oil 0 5 10 15 No.ofPartners Diversity of Export Trading Partners Maize seed Maize Grain Maize Flour Groundnuts shelled
- 12. Maize Trade Partners& Survival of Partnerships Maize Grain Imports Partner Market Share (%) Survival (yrs) Mozambique 31 14 South Africa 28 13 Zambia 12 9 USA 11 10 Others 18 Maize Grain Exports Partner Market Share (%) Survival (yrs) Zimbabwe 62 11 Kenya 20 5 Others 18
- 13. Partners for groundnutexports Partner Market Share (%) Survival (yrs) Tanzania 29 11 South Africa 26 12 Kenya 20 8 Zambia 15 14 Others 10
- 14. Partners for soybeanimports Partner Market Share (%) Survival (yrs) South Africa 45 13 Argentina 40 13 Mozambique 5 6 Others 10
- 15. Share of regionaltrade Flow Parameter Maize Soybean Groundnuts Imports Value (USD’million) 17.4 16.3 0.5 Intra SADC (%) 78 52 23 Exports Value (USD’million ) 17.9 2.2 10.3 Intra SADC (%) 97 98 96
- 16. Discussion Summary • Deficitsin general – Net outflows considered unfavourable to BoP – Yet imports widen consumer choice – Competitively priced imports • reduce threat of inflation • Gives opportunity for low-cost production • Jobs saved not lost • High-tech/low-tech trade – Deficit in primary and capital products favourable to domestic business and economic growth • Outward vs inward-looking trade – Openness to competition good for growth
- 17. Discussion summary (2) •Growth in value lagging behind growth in volumes • Malawi’s growth above regional average – Increasing market share – Less barriers inhibiting trade
- 18. Discussion summary (3) •Malawi’s product and geographic diversification (trade base) not improving – Growth in intensive (regional) rather than extensive margin • Markets moderately concentrated & international risk less managed – Less economies of scope being realized • Trading revenue and experience remains muted • Domestic industries vulnerable to competition and global demand and price shocks • High survival rates of trade relations with neighboring countries – Potential to expand trade regionally
- 19. Limitations and possiblefuture research • Trade in goods not services • Formal flows only measured in current USD – Discrepancies between imported and exported USD figures • No account for re-exports • No account of actual value addition in-country – Gross flows overstate economic contribution • Eg., export of refined cooking oil by S. Africa require imports of crude oil from S. America • Better metrics needed to measure contribution of trade to income and employment – Value-added trade statistics
- 20. Conclusions • Export growthtargets being achieved – growth in value trails growth in volume • Trade relations with neighbours have survived – Potential for trade expansion intra-regional • Diversification (product and geographic) not being achieved – Trade growth remains vulnerable to competition and global shocks • Development and support of a trade diversification strategy necessary