Factors affecting coffee exports in Zambia
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Date
2015-10-26
Authors
Chileshe, Moses
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Abstract
This study investigates the factors that affect coffee exports in Zambia. A regression model is postulated based on international trade theory and estimated using SPSS. Given that there was no serious deviation from the Classical Linear Regression Model (CLRM), Ordinary Least Squares (OLS) was used to estimate the model. Data for the model was obtained from Zambia Coffee Growers Association (ZCGA), Ministry of Agriculture and Co-operatives (MACO), Coffee Board of Zambia (CBZ), FAO's World Agriculture Information Centre (WAICENT) website on Internet, Bank of Zambia (BOZ), Export Board of Zambia (EBZ) and Central Statistics Office (CSO).The results suggested that the cost of inputs, lagged price of coffee, real exchange rate, lagged price of cotton have a significant effect on net quantity of coffee exported per capita. Except for the lagged price of coffee, the quantity of coffee exported is highly responsive to slight changes in the variables. In other words a positive increase in the lagged price of coffee will cause a small increase in the quantity of coffee exported. While for a decrease in the cost of inputs and price of cotton, there will be a greater proportionate increase in the quantity of coffee exported and the converse is also true. In the case of the exchange rate depreciation of the currency, will increase the competitiveness of the country and consequently increase the net amount of coffee exported per capita and the converse is true. The other variation not explained by the model might be due to other factors, which cannot be easily quantified such as technology, transportation, extension services, reliability of the marketing net works and organizations.Based on these findings, it is recommended that Government intervention through provision of inputs subsidies, ensuring competitive prices for coffee and reduction on the overvaluation of the kwacha will support the coffee sector and consequently increase the net quantity of coffee exported per capita. Further more government intervention through the provision of addition skills on the part of the producer, provision of suitable markets, technology and information environment will help support the coffee sector. Finally there is need for a comprehensive study to analyze the main factors affecting foreign countries imports of coffee, and to interpret the implications for Zambian coffee policy.
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Keywords
Coffee Exports-Zambia , Coffee trade-Zambia