Regional Markets

3 Cases
Transport
The two main modes of transport for rice from the mills to Dar es Salaam and the urban
markets are by truck and by train. There is some price sensitivity and it is not exactly
clear when one mode is preferred over the other. In Mbeya, all the traders use trucks.
However, in Ifakara, the larger traders shipped their rice by train to Dar es Salaam.
The difference between the two modes is related to the availability of cheaper forms
of transport. There is a lot of truck traffic coming through Mbeya, and along the main
paved road, returning from Zambia. The fact that they can get cheaper backhaul rates
and that there is a great frequency of trucks makes it easy and cheap to use trucks. In
contrast, Ifakara is at the end of a long, poorly maintained dirt road. The cost of truck
transport from Ifakara to Dar es Salaam is nearly as high as from Mbeya, even though
it is much closer. In contrast, the price of rail transport is much lower from Ifakara than
it is from Mbeya, making the train a better option for large quantities.
There are important implications for the transport of rice by rail compared to trucks.
First of all, rail is more transparent and therefore subject to the cess. Secondly, the
weight is measured and it is difficult to get around it by overpricing bags, as traders
do with trucks, so there is a very smaller fee to fill the bags. Thirdly, since it comes in
and out of the train depots, there needs to be an organised receiver in Dar es Salaam.
Therefore, the train might be a viable option for a large shipper, with the systems and
facilities, but it is not a viable option for the small trader.
Cereal markets
As mentioned earlier, most cereals are locally consumed by rural households. They consume
the greater part of their own production and sell what is left. In rural villages,
there might be a mill (to process the cereals before consumption) and there is some
trade in cereals, but this appears to be limited. Commodities consumed in the rural
areas come strictly from local production.
Most of the rice and maize eaten in urban areas is purchased (not home grown), either
in bulk by the kilogram or also in supermarkets and stores in pre-packaged bags.
There can be substantial price differences depending on the quality of the rice. Rice from
Kyela has the reputation to be of the highest quality in Tanzania, with a special aroma,
likening it to basmati rice from India. Imported rice from Thailand, the Sabarmati variety
and rice grown in Shinyanga region have the lowest prices. To increase final sales
price, it is not uncommon for retailers to mislabel or mix different grades of rice.
55