An analysis of the cabbage, onion, potato and tomato market structure in Arumeru District of Tanzania

Abstract

Monthly retail market prices for cabbage, onions, potatoes and tomatoes reported by the Tanzanian Ministry of Agriculture for the City of Arusha were analyzed. The analysis indicates that tomato prices are generally the highest followed by onion, potato, and cabbage prices. Significant seasonal variation was found for tomato, onion and cabbage prices but in contrast, potato prices show no significant seasonal variation. The high price months are May or June and these months correspond to the end of the long rainy season. The last three months of the year are the low price months and these months correspond to the beginning of the short rainy season. Contrary to prices found in developed markets, the highest relative variability in prices occurs during low price months. Evidence of a structural change in the price series for cabbage, onions and potatoes was found (the tomato series was too short to test for a structural change). The change took place between the latter months of 1988 and the early months of 1989 and possible factors responsible for the change were postulated. The change was more pronounced for cabbage and potatoes. The market structure identified through a survey instrument administered to market participants during the summer of 1992 revealed variations across vegetables, participants, and price levels. The differences were primarily found at the producer/ trucker and trucker/wholesaler levels. Producers captured relative large shares of consumer expenditures on the vegetables. In the cabbage market, retailers captured the largest consumer expenditure share and the share was invariant relative to price levels. In the onion and potato markets, producers captured the largest share and the shares were also invariant relative to price levels. In the tomato market, producers captured the largest share during low price months.