Demand of Imported Rice in Mozambique (2011 - 2020)

Abstract

Rice plays an important role in the food and nutrition security of the Mozambican population and has been importing rice to meet growing consumption needs. There are several studies regarding demand of imported rice worldwide. However, it is noted that despite the importance of imported rice in national consumption, the empirical and quantitative studies on the demand for imported rice in Mozambique are scarce. This study results from the need to contribute to filling the information gap by providing the quantification of the impact of income and price on the consumption of imported rice. Based on monthly rice import data from 2011 to 2020, obtained from INE, the Source Differentiated Almost Ideal Demand System (SDAIDS) model and the Seemingly Unrelated Rules (SUR) approach are applied to estimate demand systems for imported rice. The period was chosen due to availability of data. The results of this study show that the national production of rice still does not cover internal needs, so the country resorts to imports to fill the deficit. The elasticities of demand for rice imported into Mozambique show that all income elasticities of demand are statistically significant, except for “other countries” or Rest of the World. The results also show that when income increases by 1%, the demand for rice increases by 1.2% when coming from “Pakistan”, and by 1.1% when coming from “Singapore”, by 1.03% for “Vietnam”; and in for those from “Myanmar” (1.1%), which suggests that rice from these countries can be classified in the luxury goods category. The results also illustrate that when the price increases by 1%, the quantities demanded decrease, on average, by 1.06% for rice coming from “Pakistan”; by 1.06% for those from “Singapore”; 1.22% for those from “Myanmar”; 0.96% for those from “Vietnam”; by 0.89% for “India”; by 0.79% for “China”; in 0.974% for “Thailand” and in 0.56% for those coming from “other countries”. The low levels of production and productivity show that it is still a challenge to guarantee rice self-sufficiency in Mozambique, and efforts to improve supply must continue, since the country's dependence on imported rice can potentially create conditions of vulnerability and insecurity and adverse market effects have competitive advantages.