Marketing in Zambia

This article examines the configuration and effectiveness of cotton and maize marketing in Zambia and Zimbabwe for the purpose of identifying circumstances that lead to under-provisioning of these agricultural commodities. It examines changes in exchange rates for proof of the domestic industry’s ability to fill the vacuum left by the retreat governmental programmes. It concludes that there has been no significant progress in marketing in Zambia or Zimbabwe since the early 1990s. It suggests that, given the level of insecurity prevailing in both countries, it may be unrealistic to expect any real improvement.

The first aspect of this analysis is to identify the nature of the market. A market based on agriculture is characterised by local producers competing for local markets. Prices are driven by demand and supply dynamics between sellers and buyers. These markets can also be segmented based on criteria such as gender, age, ethnicity and socioeconomic status. The programme in Zambia sought to address the needs of its rural and tribal customers by marketing specific produce to them, including local and indigenous vegetables, fruit and livestock. Some changes to the marketing programme have led to an improvement in rural marketing however; competition has increased and prices have subsequently fallen.

The second aspect of this analysis considers the assumption that prices will remain fairly constant over the period of the programme. The duration and magnitude of price fluctuations therefore depend on assumptions about future commodity prices and their nature (e.g. effects of trade liberalisation) and programme factors such as yield levels and quantities sold. Assuming a level of stability is therefore essential.

The duration and magnitude of price fluctuations therefore depend on assumptions about future commodity prices and their nature (e.g. effects of trade liberalisation).

The third aspect considers the assumption that agricultural production will remain at roughly the same level year on year. This assumption can be assessed using similar data from other countries who have implemented similar programmes (e.g. South Africa and Zimbabwe). Comparison of the volume of productions with this year’s figures and then year ago’s figures for each country provides a reasonable picture of long term trends. It shows that the volume of production available through the contract market has not been reduced since the introduction of the programme.

As well as a general decrease in agricultural production, there have been substantial changes to the nature of contracts that affect the marketing of Zambia’s sugar industry. Most importantly, it now requires a payment of up to 10% of the gross production of a crop to be eligible for set purchase prices (introduced in 2021). This includes not only raw sugar but also sugarcane juice and molasses. A further alteration introduced in 2021 is that any surplus which is not marketed must be stored for three years and must then be sold before it is sold to another contract processor.

There are two other indicators that show the impact of marketing in Zambia on the export market and the Zambian economy. The first relates to the volume of sales and purchases of agricultural goods, both domestic and imports, on the import market. The second relates to the volume of exports, both domestic and imported, on the market. The former indicates an increase in market penetration as buyers from all over the world become more familiar with the programme; the latter is related to the fact that Zambia’s programme is priced sufficiently low relative to other African countries to ensure that it attracts purchases not currently available in the market.

Overall, the impact of marketing in Zambia on the sugar market can be assessed as having little effect. Though prices are not expected to decline dramatically, there will likely be fluctuations as the programme progresses. Ultimately, there is no way to assess how the programme will impact Zambia’s overall competitiveness compared with other countries in the international market. However, with marketing in Zambia focusing on quality growth and the extension of service, there is a greater chance that market participants will perceive the programme favorably. Whether or not this perception materialises remains to be seen.

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