Upgrading the Tanzanian Agricultural Commodity Exchange Market under the Warehouse Receipt System: A Review of Forward Market Linkages in Sunflower Agribusiness

Molela Godfrey Frank ()
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Molela Godfrey Frank: University of Dodoma, Tanzania

Journal of Agribusiness and Rural Development, 2025, vol. 77, issue 3, 316-324

Abstract: This study examines the difference in gross margin between processed and unprocessed sunflower seed businesses in Tanzania. Further, it evaluates the coordinated trading arrangements under the commodity exchange market and warehouse receipt system. A cross-sectional survey was conducted, collecting primary data from 399 smallholder sunflower farmers across 11 AMCOS operating in Kondoa and Itigi District Councils. Data from 317 farmers pertained to unprocessed sunflower seeds, while 82 farmers provided data on processed sunflower seeds businesses. Gross margin analysis revealed that smallholder farmers engaged in the sunflower oil business earned TZS. 2,394,140.98 per acre, 5 times the gross margin of TZS. 455,094.60 per acre earned by those selling unprocessed seeds. Secondary data from the Tanzania Corporation Development Commission (TCDC), Tanzania Mercantile Exchange (TMX), and the Warehouse Receipt Regulatory Board (WRRB) indicated that the current marketing framework inadequately supports the trade of processed agricultural products. Given the significant disparity in gross margins, this study recommends upgrading the existing system by introducing a dedicated trading window for value-added agricultural products.

Keywords: small-scale agribusiness; commodity exchange market; warehouse receipt system; gross margin; sunflower sub-sector (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:pojard:v:77:y:2025:i:3:p:316-324:n:1004

DOI: 10.17306/j.jard.2025.00018r1

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