Master's Thesis from the year 2007 in the subject Business economics - Miscellaneous, grade: A, , course: Agric Economics, language: English, abstract: This study examined the dynamism of price movement between markets and its implication on pricing efficiency in maize markets. Primary data were collected using interview guides. A total of 240 respondents were selected using stratified random sampling technique in 6 rural and 6 urban markets in Ogun State. Weekly retail prices of yellow and white maize for five years (January 1999-December 2003) were analysed using the Bivariate Cointegration test and the Granger causality test to detect the presence and level of price integration. In Ogun State, domestic production of maize increased by 9 percent a year between 1990 – 2001. Although the growth in maize production may be attributed to cultivating more crop area and/or the adoption of improved open pollinated and hybrid maize varieties which provide the major stimulus for increased yield on the average. Annual growth rate of maize yields was 9.08 percent during 1990 - 2001. Most of the growth came from yellow maize, which increased at 8.92 percent annually, compared with 3.57 percent for white maize. In comparison with other states in South-West however, the Ogun state average yield of 1.41 metric tons per hectare is the lowest. i. How integrated are the maize markets in the study area? ii. Are there evidences of lead-lag relationship among spatial maize markets in Ogun State? iii. Are there evidences of communication of information to integrate spatial markets? iv. How long does it take information to become common knowledge across spatially dispersed markets (temporal effect)? v. Are the market systems competitive or not?

This study tests the long-run and short-run integration of maize markets in Malawi using the co-integration approach within the Vector Autoregressive modeling framework. The analysis is extended to Wald-F Granger Causality tests to see the direction of causality between maize markets. A total of six maize markets, two from each region, were analyzed. Three are urban markets, while two of the three rural markets are border markets. The study uses monthly maize retail prices for the period January 2000 to May 2008. Study findings show that nine out of the fifteen market pairs are integrated in the long-run, but the degree of short-run market integration is low, implying that the transmission of price information is slow.

Seasonal analysis of the structure, conduct, and performance (SCP) of markets for staple crops has received relatively little attention in food policy analysis yet it has important implications for food and nutrition security. This study employs a mixed methods approach to analyze the SCP of maize markets in Malawi in the 2018/19 main harvest and lean seasons. We interviewed 749 traders from 74 markets across 8 districts, held 28 focus group discussions (FGD) with a total of 480 farmers and analyzed daily and weekly price data from 13 regional markets. The structure of maize markets was explored by examining marketing channels, barriers to entry and the competitiveness of different tiers of the marketing chain. Inequality in sales revenues, switches in trader types between seasons, quality and weights standardization, and the behavior of traders were used to examine market conduct. Performance was assessed by examining traders’ costs and margins, and the spatial and temporal integration of maize markets. We find that Malawi’s maize market is pyramidal in structure and highly competitive at lower tiers of trade but ‘oligopolistic’ at higher tiers. The market channels vary across seasons with switches between trader types and instances of rural-urban trade reversals. There is considerable inequality of sales revenues among traders of similar capacities, and a widespread lack of structured trading despite existing institutions. A high ratio of marketing costs to revenue suggests marketing inefficiencies. Malawi maize prices were highly seasonal and more volatile than neighboring countries. In contrast to previous studies, our findings show weak spatial integration of markets and slow price adjustments to long-run equilibrium values even among short-distance market pairs. The study highlights five pathways to improving Malawi’s maize marketing system: (1) increased policy predictability to promote private-sector investment; (2) institutionalization of quality grades and standardization of weights and measures; (3) increased commercialization of smallholder maize production; (4) investment in enabling infrastructure; and (5) the promotion of structured trading.

The issue of market integration lies at the heart of many contemporary debates concerning market liberalization, price policy, and government agency reforms in developing country food markets, Mozambique being one of the poorest. Without spatial integration of markets, price signals will not be transmitted from deficit to surplus areas, prices will be more volatile, agricultural producers will fail to specialize according to long-term comparative advantage, and the gains from trade will not be realized. The objective of this article is to indicate the extent of market integration between major Mozambican maize markets. Recognizing the statistical dangers and inaccuracies of using measures of price correlation to test for market integration, a new methodology for testing the state of food market integration is employed in this study, namely the parity bounds model, (PBM) as developed by Baulch (1997). This method provides a more reliable procedure for testing violations of spatial arbitrage conditions than conventional methods, because it compares time series of observed price differentials with transfer costs and explicitly recognizes that spatial arbitrage conditions are represented by inequality constraints. The results point to a failure of spatial arbitrage conditions between the Maputo and Chimoio markets about 23% of the time over the period.

This book provides fresh insights into concepts, methods and new research findings on the causes of excessive food price volatility. It also discusses the implications for food security and policy responses to mitigate excessive volatility. The approaches applied by the contributors range from on-the-ground surveys, to panel econometrics and innovative high-frequency time series analysis as well as computational economics methods. It offers policy analysts and decision-makers guidance on dealing with extreme volatility.