Analysis of cassava starch market and prospects for developing a sustainable cassava value chain in South Africa

Zinhle Zandile Nkosi, Mmapatla Precious Senyolo, Abenet Belete, Petronella Chaminuka, Kenneth Nhundu and Sukoluhle Mazwane

No 364833, 2023 Seventh AAAE/60th AEASA Conference, September 18-21, 2023, Durban, South Africa from African Association of Agricultural Economists (AAAE)

Abstract: The cassava starch market in South Africa is dominated by imports and an insignificant amount of exports. This makes imports and exports a frame of reference for understanding the nature of the country’s cassava starch market. South Africa’s primary source of cassava starch is imports, making it susceptible to value chain disruptions similar to those induced by the Covid-19 pandemic. These disruptions result in the trade-inhibitory effect, which weakens the degree of trade liberalization, leading to high market access barriers and a sharp rise in trade costs. This will subsequently result in a shortage of cassava starch in South African markets. The shortage will have a direct negative impact on the food system, which is dependent on cassava starch imports, weakening its resilience and its sustainability. Thus, the study aims to analyse of cassava starch market with prospects to develop a sustainable cassava value chain in South Africa. The study used time series data from the Trade map, which was monthly imports and exports of cassava starch by volume and value. The patterns were determined using a trend analysis, which showed that cassava starch imports were significantly higher than cassava starch exports throughout the observed period. The Vector Error Correction Model (VECM) and the Impulse Response Function (IRF) were employed when testing the causality relationship between cassava starch import and export volumes and values. The results show that a long run relationship exists between cassava starch imports and exports. The (VECM) showed that when there is a deviation in cassava starch exports, 71% of the cassava starch exports are restored in the long run. The IRF showed that when there is a shock in imports the export responds by decreasing in the 1st period and stabilize in the 4th period below the general level. The study recommends that the significantly high imports should be used as a driver to develop a cassava value chain in South Africa. The country can use Thailand as a blueprint because it is a leading producer of cassava starch in the world.

Keywords: Crop; Production/Industries (search for similar items in EconPapers)
Pages: 20
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaae23:364833

DOI: 10.22004/ag.econ.364833

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