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Abstract
The agricultural trade of the Sudan is expected to develop under the recent dramatic
increase of world food prices. Sudan as one of the developing countries and as price
taker on the world agricultural market has been affected greatly by the world price
increase. This paper aims at studying the impact of the increasing world food prices
on developments of the agricultural crops trade sector of Sudan. In this paper a multimarket
model is used as the main tool to estimate the increase of the world food prices
on the crop trade sector. Multi-market analysis is a tool for simulating the effects of
agricultural price policies on outcomes considered of interest to policy makers. The
model under consideration takes the normal specification of a standard partial
equilibrium model; it is static and consists of a set of demand and supply equations
for each commodity with the level of production and demand determined by factors
including prices, income, and demand and supply-shift variables, in addition to
various other assumptions about policies. Price transmission equations in the model
establish links between the domestic price, the producer price (for producers of
exportable products and of import-substitute products), the consumer price and the
world market price. The model has been developed to calculate the impact of high
food prices on the main economy variables including supply and demand of the major
agricultural commodities. The scenario of high world food prices showed on one
hand, an increase in farmers' incentives resulting in higher levels of production of
agricultural commodities, on the other hand, consumers demand has decreased
significantly, and trade indicators reflect a positive effect on the agricultural crop
trade sector.