Evaluating price volatility and the role of trade in Eastern and Southern African maize markets

Food price volatility, particularly in key food staple markets, has been a long standing challenge in Sub-Saharan Africa, where prices are already some of the highest in the world. In many cases, governments have acted to curb volatility, though several researchers have shown that actions aimed at reducing volatility in the short run have often been counterproductive for long term aims of market led productivity growth that would be able to reduce high prices in the region. With increased intra-regional trade having been proposed as a solution to volatile prices in the region, this study finds that across a sample of 36 maize markets in Eastern and Southern Africa between 2008 and 2014, volatility is significantly lower in markets with higher trade volumes. Thus it postulates that policies aimed at increasing the efficiency and reducing the cost of intra-regional trade will be efficient in curbing volatility in the region, thus improving food security