Impacts of Export Bans and Seasonality on Maize Price Transmission Between Selected Deficit and Surplus Markets in Tanzania: Evidence from Sumbawanga Market

Abstract

Using maize prices data from Tanzania’s National Bureau of Statistics from 2002through 2017, this paper analyses the impacts of export bans and seasonality onspatial domestic price transmission between deficit markets and the surplusSumbawanga market; using a vector error correction (VEC) model with export banand seasonality dummy variables. Results show that 45% of deficit markets convergedin the long-run with the Sumbawanga market, with a significant negative sign at 10%level. Moreover, 64% of market pairs negatively impacted spatial domestic pricetransmission, while seasonality had significant impacts on the same between marketpairs. A Granger causality suggests that 63%, 27%, and 10% of market pairs were bidirectional, unidirectional and no causality, respectively. Thus, government policiesshould incline towards increaseing maize production rather than imposing ad-hocexport bans, improving storage facilities, and mitigating climate changes to insulateseasonality: all of which will—through market mechanism—moderate consumerprices and ensure profitability among maize sellers.JEL Classification: Q17, M38