Market Opportunities for African Agriculture - International Food ...

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Among the four commodity groups, intra-regional trade in food crops accounts for a large share (44 percent) of SSA food exports: 52 percent of maize exports and 77 percent of other cereal (mainly rice) exports are imported by other SSA countries. Moreover, substantial evidence exists that sizeable unrecorded, “informal” intra-regional trade in maize, cassava, and some other food crops, (as well as livestock products) takes place, as well. However, as a food deficit region, intra-regional trade in food crops accounts for a quite small share of SSA total food imports (10.8 percent, table 6.) Among the three regions within SSA, intra-regional trade takes place within each region, and cross-regional trade accounts for less than 20 percent of total intra-regional trade for each region. Shares of intra-regional trade in each region’s total agricultural exports are quite different. Intra-regional trade was 780 million U.S. dollars in Southern Africa, 460 million in East Africa, and 440 million in West Africa per year on average over 1996-2000. Southern African intra-regional trade accounted for 15 percent of the region’s total agricultural exports, while intra-regional trade only accounted for, respectively, 8 and 6 percent of East and West African total exports. Intra-regional trade in food crops accounts for a large share (80 and 46 percent, respectively) of West African and southern African food exports, it accounts only 27 percent of East African food exports. Similarly, as food deficit regions, intra-region trade in food crops accounts for a small share of the three regions’ food imports (3 to 18 percent, appendix I tables 1 – 6.) TRADITIONAL EXPORT CROPS Traditional commodity exports account for about 50 percent of SSA total agricultural exports (60 percent, excluding SACU). For some countries, the exports are highly concentrated in a single commodity. For example, tobacco accounts for 70 to 75 percent of Malawi agricultural exports, coffee accounts for 70 percent of Uganda agricultural exports, and cotton accounts for 65 percent of Mali agricultural exports. Traditional commodity export markets are mainly in the rest of world outside the region, in which share of SSA’s exports has been declining in the past two decades. Recovering some lost market shares would help the region to increase farm income. However, an increased volume of traditional exports may (as examined below) have only limited 14
impact on export earnings and incomes, given the declining trend of prices for these commodities. Traditional exports of all African countries, except for South Africa and Malawi, experienced negative global demand growth during 1995-99, and in some cases the declines were dramatic (Ng and Yeats, 2000). Empirical evidence suggests that the income elasticities of African traditional exports are well below unity. As such, continued reliance on traditional exports will significantly extend Africa’s marginalization in world trade. This trend could be reversed, or the rate of marginalization slowed, if Africa achieved major competitive gains for the traditional export commodities to compensate for their relatively low demand growth. However, a recent analysis of Africa’s supply capacities found no evidence that these competitive gains were occurring (Ng and Yeats, 2002). a. Terms of Trade of Traditional Agricultural Exports Fluctuations in the relative prices of coffee and cocoa are a major cause of the poor performance of traditional exports. While the overall trend during the past two decades was downward, there were ephemeral surges in commodity prices and terms of trade. World commodity markets experienced a major price cycle starting in 1993. The upward phase of this price cycle lasted two to five years depending on the commodity (UNCTAD, 2001). The commodity terms of trade, calculated on the basis of world prices of broad categories of primary commodities (agricultural raw materials, food, tropical beverages, vegetable oilseeds and oils, and minerals and metals), as well as prices of African coffee, cocoa, cotton, and copper exports, vis-à-vis unit export prices of manufactures of developed countries reflect a more volatile pattern than the overall terms of trade for Africa. b. Trade Restrictions on Traditional Exports While Africa generally maintained its ability to compete with other foreign suppliers of most traditional goods, a related question concerns the importance of government-imposed trade restrictions, which place Africa in competitive disadvantage. 15
Page 1 and 2: DSGD DISCUSSION PAPER NO. 1 MARKET
Page 3: ACKNOWLEDGEMENTS We wish to thank t
Page 6 and 7: LIST OF TABLES Table 1: Some basic
Page 8 and 9: LIST OF FIGURES Figure 1: Monthly a
Page 10 and 11: imports 25 percent of its food grai
Page 13 and 14: MARKET OPPORTUNITIES FOR AFRICAN AG
Page 15 and 16: Table 1—Some basic facts about Su
Page 17 and 18: We begin with a review of broad tre
Page 19 and 20: Table 2—World and Sub-Saharan cou
Page 21 and 22: Table 3—Composition of exports fr
Page 23 and 24: This is mainly because of a signifi
Page 25: Staples Non-traditional Traditional
Page 29 and 30: ooms of the 1970s, but the trends f
Page 31 and 32: produced by smallholders, resulting
Page 33 and 34: Table 7—Export of fish and fisher
Page 35 and 36: Table 8—Summary of food safety re
Page 37 and 38: flowers and foliage to the EU. The
Page 39 and 40: The emergence and growth of the Ken
Page 41 and 42: SUMMARY Currently, the agricultural
Page 43 and 44: Table 12—Sub-Saharan African majo
Page 45 and 46: Besides the demand-side constraint,
Page 47 and 48: percent. However, because rapid gro
Page 49 and 50: pace, by 4.15 percent per year thro
Page 51 and 52: equivalent to 9 to 11 percent of ma
Page 53 and 54: esult in increased imports of lives
Page 55 and 56: this study is to evaluate African c
Page 57 and 58: In this scenario, where non-traditi
Page 59 and 60: more employment opportunities for u
Page 61 and 62: of SSA (4 percent). No additional p
Page 63 and 64: d. Combining high growth livestock
Page 65 and 66: output (Table 20). Because the chan
Page 67 and 68: This increase in TFP in the transpo
Page 69 and 70: scenarios, we find that some countr
Page 71 and 72: Per capita annual growth of cereal
Page 73 and 74: Figure 3—Impact of TFP growth on
Page 75 and 76: too long to make a significant cont
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particularly important, and better
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Franco, M., and R. Godoy. 1993. “
Page 81 and 82:
Staples Non-traditional Traditional
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Page 85 and 86:
Page 87 and 88:
Appendix I Table 7—Baseline Proje
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Appendix I Table 9—Projected annu
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Appendix I Table 11—Projected ann
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Appendix I Table 13—Agricultural
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Appendix II Table 1—Agricultural
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and in 1998 Mozambique contributed
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from 56.5 percent in 1981-83 to 40.
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Uganda has distinct competitive adv
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Victoria and their Natural Carrying
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Macroeconomic Policies In 1991, tax
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Appendix II Table 4—Agricultural
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inappropriate seeds and fertilizers
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i.e. upgrading equipments and labor
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9. Ghana 10. Guinea 11. Guinea-Biss
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21. Sugar 22. Processed food produc
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