agricultural merchandise trade outcomes
TRANSCRIPT
Agricultural Merchandise Trade Outcomes
The Case of Malawi’s Maize, Soybeans and Groundnut Product Trade (1999 – 2013)
J. Govereh, G. Matchaya & P. Chilonda
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
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%
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.
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
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
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)
Sub-sector Trade Openness
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
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 (
%)
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
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
Partners for groundnut exports
Partner Market Share (%) Survival (yrs)
Tanzania 29 11
South Africa 26 12
Kenya 20 8
Zambia 15 14
Others 10
Partners for soybean imports
Partner Market Share (%) Survival (yrs)
South Africa 45 13
Argentina 40 13
Mozambique 5 6
Others 10
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
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
Discussion summary (2)
• Growth in value lagging behind growth in volumes
• Malawi’s growth above regional average– Increasing market share– Less barriers inhibiting trade
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
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
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