Dynamics and trends of national food reserve agency maize price and local maize market price: Empirical evidence from Sumbawanga Market

Abstract

The general objective of this study is to analyse spatial maize price transmission and market integration in Tanzania with Rukwa Region as the case study. Thus, the study intended to assess dynamics and trends of National Food Reserve Agency maize price and local market maize price between Sumbawanga (the surplus market) and other selected deficit markets from 2008-2017. Monthly maize price data came from the National Bureau of Statistics and National Food Reserve Agency purchase books price records in Rukwa Region. The Vector Autoregressive (VAR) Model, granger causality and impulse response methods were used. Results indicated that National Food Reserve Agency’s price granger caused local market maize price per ton and not otherwise. Impulse Response Functions indicated that the National Food Reserve price per ton had positive transitory and permanent impact on local maize market price per ton. The government should set enough money for more and timely National Food Reserve Agency grain reserves purchase; remove export bans; and improve communication, transport, marketing and storage facilities in surplus areas.