Value chain analysis of baobab products for improved marketing and sustainability of their trade in malawi

Abstract

There is very little information on the basic market functioning and actors involved in baobab product trade of baobab products which has predominantly remained informal with limited commercialization. A study was carried out to analyse the value chain of baobab products for improved marketing and sustainability of the trade in Malawi. The objectives were: to assess actors involved in baobab trade along the value chain and map out their relationships; to analyse the benefits earned by economic actors from baobab trade along the value chain and to assess the institutional arrangements and institutions that govern baobab trade at international, national, district, and local levels. Purposive sampling was used to select the districts while snow balling technique was used in selecting the actors of baobab trade. Mapping was carried out to assess actors involved in the baobab trade and map their relationships. Gross margin analysis was done to evaluate the benefits earned by economic actors from baobab trade along the value chain. Content and narrative analyses were used in assessing the institutional arrangements and institutions that govern baobab trade.Six categories of actors of baobab trade were identified, namely; harvesters, wholesalers, processors, retailers, consumers, and exporters. Three types of relationships exist between baobab actors in Malawi, namely; spot market relationship, persistent network relationship, and horizontal integration relationship. In terms of gross margins, individual harvesters get 92%; wholesalers selling pulp (80%), Juice Company (61%), household processors (79%), supermarkets (13%) and finally cooperative union exporting baobab products get 80%. International Organization for Standards (ISO), Fair-trade Labeling Organization (FLO), and others are at international level providing environmental, organic standards, certification and setting quality standards. Government of Malawi with its institutions of Vision 2020, Malawi

Growth and Development Strategy (MGDS) II, National Environmental Policy and Forest Policy falls at national level. Cooperative Union promoting market linkages for cooperative groups is at district level while at local level there is baobab association and market committees providing quality raw material and facilitating social welfare respectively. Actors in baobab trade in Malawi need to get involved in horizontal integration relationship because not only does it increase market power, market share, and economies of scale, but also it reduces production costs as well as competition. Since Malawi is the key producer of baobab pulp in the Southern region of Africa, there is need for the Government of Malawi and other institutions to domesticate programs of baobab to sustain production of improved products which attracts higher prices in local chain stores and on international markets.