Determinants of Rice supply for export markets in Tanzania

Despite Tanzania being the leading rice producer in East African Community region, existence Common External Tariff trade policy, government interventions in rice sub sector and high production potential in the country rice supply to the export market in Tanzania is low. The present study was conducted to analyse the determinants of rice supply for export markets in Tanzania. Specifically, the study focused on examining the influence of price and non-price factors on rice export, assessing the competitiveness of Tanzanian rice exported and identifying factors affecting participation in export markets by rice traders. The study used mainly secondary data and occasionally supplemented with primary data. Secondary data were collected from government institutions and other sources such as FAOSTAT and WITS while primary data were collected from 150 randomly selected rice traders in Tanzania. Vector Error Correction Model was used to capture the dynamics of rice export in Tanzania. Competitiveness of rice exported was assessed using Revealed Comparative Advantage while factors affecting participation of rice traders in export markets were identified using binary logit regression. Results show that; real exchange rate, international rice price, average GDP per capita of importing countries and quantity produced lagged one period are the factors that influence rice export in Tanzania. Rice exported was found to be less competitive in international markets. Factors affecting market participation in export markets were; sex, years of experience in rice trade and access to market information. The study concludes that poor competitiveness of Tanzanian rice exported and lack of market information by the rice traders are the major limitations towards rice export in Tanzania. The study suggests that, the government should increase investment in rice production by subsidising inputs and developing means to ensure accessibility of market information by rice traders so as achieve competitiveness and to meet rice export demand to the neighbouring countries and to the world at large.

Prof. Reuben Kadigi