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Abstract

This paper analyzes the effects of the opening of trade with Malawi on producer and consumer prices in Mozambique. It finds that prices were positively and significantly affected by this trade in the north of the country, where agroecological potential is greatest and rural population densities are highest. Prices in the main urban centers of the south and center were unaffected. Overall, most producers benefited from the trade while most consumers were not affected. The paper concludes that Mozambique should lobby aggressively for open trade in maize within the SADC Trade Protocol. It suggests, however, that the country must look beyond Malawi in developing its export markets, and that the SADC region is likely to provide a market for exports during most years. Finally, it emphasizes that efforts to intensify maize production are likely to fail in the absence of such trade, so that initiatives to deal with the institutional and technical challenges of intensification must be pursued in the context of developing these regional markets.

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