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AAMP Training Materials. T.S . Jayne ( MSU ) jayne@msu.edu. Module 4.3: Marketing Margins & Marketing Costs. Objectives. Understand relationships between food prices between countries Examine the relationships between food prices at different marketing levels.

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aamp training materials

AAMP Training Materials

T.S. Jayne (MSU)

jayne@msu.edu

Module 4.3: Marketing Margins & Marketing Costs

objectives
Objectives
  • Understand relationships between food prices between countries
  • Examine the relationships between food prices at different marketing levels
motivation
Motivation
  • Why bother studying the relationship between food prices in one market and another?
  • Why bother studying the relationship between food prices at one level (e.g., farm-gate) and food prices at another level (e.g., retail)?
definitons
Definitons
  • Spatial marketing margins
  • Spatial marketing costs
  • Vertical marketing margins
  • Vertical marketing costs
slide9
Luchenza retail price and farmer-reported prices received in remote villages in Mulanje District, 2009/10 marketing year
determinants of marketing margins
Determinants of marketing margins
  • Spatial margins:
    • 1
    • 2
    • 3
  • Vertical margins
    • 1
    • 2
    • 3
why might margins costs
Why might margins ≠ costs
  • Spatial margins:
    • 1
    • 2
    • 3
  • Vertical margins
    • 1
    • 2
    • 3
what does it mean if
What does it mean if:
  • Spatial margins < transfer costs
    • 1
    • 2
    • 3
  • Spatial margins > transfer costs
    • 1
    • 2
    • 3
exercises
Exercises
  • Examine maize prices at
    • SAFEX
    • Blantyre, Malawi
    • & Transfer costs between them
  • Compute the spatial price spread
  • Compute import parity prices at Blantyre
  • On the basis of spatial margins vs. transfer costs, predict the months in which you would expect to see imports occurring
  • Compare this with actual trade flows
  • Explain the reasons for what you see