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The Future of Smallholder Farming in Eastern Africa - Uganda ...

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Figure 5.1: Average daily retail prices <strong>of</strong> different teff types<br />

300<br />

250<br />

200<br />

150<br />

100<br />

50<br />

0<br />

6.03.2002<br />

13.03.2002<br />

20.03.2002<br />

27.03.2002<br />

3.04.2002<br />

10.04.2002<br />

17.04.2002<br />

24.04.2002<br />

2.05.2002<br />

12.05.2002<br />

Prat Prw t Prbt<br />

19.05.2002<br />

26.05.2002<br />

4.06.2002<br />

11.06.2002<br />

18.06.2002<br />

27.06.2002<br />

3.07.2002<br />

10.06.2002<br />

17.07.2002<br />

24.07.2002<br />

31.07.2002<br />

It is important to exam<strong>in</strong>e the trend <strong>of</strong> the ratio <strong>of</strong> the wholesale to retail price to gauge the<br />

magnitude <strong>of</strong> the market<strong>in</strong>g marg<strong>in</strong>. <strong>The</strong> evidence shows that Ethiopian traders operate<br />

with<strong>in</strong> a very small gross marg<strong>in</strong>. <strong>The</strong> ratio fluctuated around 0.94, 0.95, and 0.95 for Adda,<br />

Wollenkomi, and Gojjam/Bechena teff, respectively, suggest<strong>in</strong>g that retailers’ price marg<strong>in</strong><br />

was not large enough (Figure 5.2). In other words, the wholesale price was not significantly<br />

different from the retail price. Whereas the trad<strong>in</strong>g marg<strong>in</strong>s <strong>of</strong> Wollenkomi and<br />

Gojjam/Bechena teff were stable, the trad<strong>in</strong>g marg<strong>in</strong> for Adda teff showed volatility over<br />

time.<br />

Figure 5.2: Ratio <strong>of</strong> wholesale to retail prices for Adda teff<br />

1<br />

0.98<br />

0.96<br />

0.94<br />

0.92<br />

0.9<br />

0.88<br />

0.86<br />

6.03.2002<br />

13.03.2002<br />

20.03.2002<br />

27.03.2002<br />

3.04.2002<br />

10.04.2002<br />

17.04.2002<br />

24.04.2002<br />

2.05.2002<br />

12.05.2002<br />

19.05.2002<br />

26.05.2002<br />

4.06.2002<br />

Adda Teff<br />

11.06.2002<br />

18.06.2002<br />

27.06.2002<br />

3.07.2002<br />

10.06.2002<br />

17.07.2002<br />

24.07.2002<br />

31.07.2002<br />

A similar pattern was observed for wheat and maize. <strong>The</strong> difference between the wholesale<br />

price and retail price for these crops was not large. <strong>The</strong> marg<strong>in</strong> for wheat grade 1 fluctuated<br />

around 0.94 and 0.92 dur<strong>in</strong>g the period under review (Figures 5.3 and 5.4).

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