agricultural merchandise trade outcomes
TRANSCRIPT
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Agricultural Merchandise Trade Outcomes
The Case of Malawi’s Maize, Soybeans and Groundnut Product Trade (1999 – 2013)
J. Govereh, G. Matchaya & P. Chilonda
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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
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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%
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UN General Trade System
• 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.
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Malawi Tradeable Products
Product classes
Sub-sectors
Maize Groundnuts Soybean
Primary Grain Shelled/unshelled Bean
Intermediate Bran Crude oil
Final Flour Refined oil
Capital Seed
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Orientation and Growth of 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
2013U
SD M
illio
ns
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
USD
Mill
ions
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
USD
Mill
ions
Size of Groundnut Trade Flows in Malawi
Imports Exports Balance
(10) (5) - 5 10 15 20
Maize
Soybean
Groundnuts
Maize
Soybean
Groundnuts
SAD
CM
alaw
i
Growth (%/yr)
Average annual growth in Trade Malawi vs SADC
Exports Imports
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Growth in value vs growth in weight
Imports Exports Imports Exports Imports Exports Imports Exports Imports ExportsMaize Seed Maize Grain Soybean Refined Soybean Crude Groundnut
Shelled
-10
-5
0
5
10
15
20
25
Weight Value
Gro
wth
(%/y
r)
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Sub-sector Trade Openness
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HS6 Product Concentration Index
Imports Exports Imports Exports Imports ExportsMaize Groundnuts Soybean
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
Conc
entr
ation
Inde
x
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Diversification by stage of production
Import Export Import Export Import ExportGroundnut Soybean Maize
-
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
100.0
Primary Intermediate Final Capital
Per C
ent (
%)
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Diversity of Trading Partners
02468
1012
No.
of P
artn
ers
Diversity of Import Trading Partners
Maize seed Maize Grain Maize Flour
02468
1012
No.
Of P
artn
ers
Diversity of Import Trading Partners
Groundnuts shelled Soybean Crude Oil
Soybean Refined Oil
0
5
10
15
No.
of P
artn
ers
Diversity of Export Trading Partners
Maize seed Maize Grain
Maize Flour Groundnuts shelled
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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
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Partners for groundnut exports
Partner Market Share (%) Survival (yrs)
Tanzania 29 11
South Africa 26 12
Kenya 20 8
Zambia 15 14
Others 10
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Partners for soybean imports
Partner Market Share (%) Survival (yrs)
South Africa 45 13
Argentina 40 13
Mozambique 5 6
Others 10
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Share of regional trade
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
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Discussion Summary
• Deficits in 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
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Discussion summary (2)
• Growth in value lagging behind growth in volumes
• Malawi’s growth above regional average– Increasing market share– Less barriers inhibiting trade
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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
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Limitations and possible future 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
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Conclusions
• Export growth targets 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