Sesamy Prod and Marketing PDF

The Economics of Sesame Production and Marketing
in Gadarif and North Kordofan Rainfed Sector -

Sudan
By
Hala Yousif Ahmed Abu Adel

B.Sc. Agric. (Honours)
Department of Agricultural Economics
University of Khartoum
1998
M.Sc. Agric. Econ.
2004
A thesis presented to University of Khartoum for

fulfillment of the requirement for the Ph.D. Agric. Econ.
Supervisor : Ali Abdel Aziz Salih
Department of Agricultural Economics

Faculty of Agriculture
November 2010
Dedication
To my dear mother, father

To my sincere husband
To my lovely sons
i
Acknowledgment
My thanks are to Dr. Ali Abdel Aziz and Dr. Hisham Mohamed El
Hassan who provided guidance and encouragement throughout the
study. My thanks and appreciations are also extended to Prof.
Babiker Idris for his suggestion and guidance. I also pay my
sincere thanks to Dr. Abdel Karim Hassan Awad El Karim for his
support in providing the electronic library and computer services
and facilities.
My thanks go to my colleagues and staff members of the
Department of Agricultural Economics for their help and
encouragement.
I am strongly indebted to my father, mother sisters and brothers for
their supports and encouragement. My thanks are extended to my
husband's sisters for their help.
I would like also to extend my deep thanks to my husband for his
patience, support, encouragement and help.
ii
Abstract
The main objective of this study was to evaluate the effects of the main
economic factors on sesame production, marketing and exports of Gadarif
and North Kordofan States, of Sudan. The study tested the positive
hypothesis of socio-economic characteristics on producers and traders, high
share of harvesting, crop physical losses and transportation costs, existence
of market oligopoly, and co-integration of markets in Sudan and with the
export market. Primary data for season 2008/09 was collected through a
field survey using a structured questionnaire from a simple random sample
of 360 producers (200 in Gadarif, 160 in North Kordofan), 132 traders (59 in
Gadarif, 43 in Elobeid, and 30 in Om Rawaba), and 40 exporters (18 in
Gadarif, 11 in El Obeid, and 6 from different states). Secondary data were
also collected from official sources. The study used descriptive statistic,
marketing margins, budgeting, policy analysis matrix (PAM), and time
series temporal and spatial co-integration methods for analysis. The results
indicated that Egypt the largest importer of sesame from Sudan during 2000-
2009, that the share of farmers’ price was about 75% on average of the FOB
prices, and that the market-margin shares of the exporters exceeded those of
the assemblers. The study also revealed the existence of oligopoly among
traders and exporters of sesame in the three markets and export market, and
that sesame crop was profitable despite the high cost of harvest, physical
losses and transportation in production and marketing activities. The PAM
analysis revealed the competitive position of sesame exports of Sudan
despite high implicit and explicit taxes that might have acted as a
disincentive to producers and traders alike. The results also indicated the
iii
instability of prices of sesame as concluded by the temporal analysis and
existence of co-integration between exports’ and domestic markets in the
long run. The study recommended reducing sesame production and
harvesting cost through breeding of non-shattering varieties; reducing
marketing cost through introduction of sieving process in the production
areas to reduce physical losses; improving infrastructure to reduce
transportation cost of sesame. The study also recommended the application
of market regulations to attain efficient market structure and performance;
supplying of market credit to traders to avoid oligopoly practices, and
ensuring of production of quality sesame for increased export of Sudan.
iv
‫ﺍﻟﻤﺴﺘﺨﻠﺹ‬
‫ﻫﺩﻑ ﺍﻟﺩﺭﺍﺴﺔﺍﻟﺭﺌﻴﺴﻰ ﻜﺎﻥ ﻟﺘﻘﻴﻴﻡ ﺘﺄﺜﻴﺭ ﺍﻟﻌﻭﺍﻤل ﺍﻻﻗﺘﺼﺎﺩﻴﺔ ﺍﻷﺴﺎﺴﻴﺔ ﻋﻠﻰ ﺇﻨﺘﺎﺝ ﻭﺘﺴﻭﻴﻕ ﻭﺼـﺎﺩﺭ‬
‫ﺍﻟﺴﻤﺴﻡ ﻓﻰ ﻭﻻﻴﺘﻰ ﺍﻟﻘﻀﺎﺭﻑ ﻭﺸﻤﺎل ﻜﺭﺩﻓﺎﻥ)ﺍﻟﺴﻭﺩﺍﻥ( ‪ .‬ﺍﺨﺘﺒﺭﺕ ﺍﻟﺩﺭﺍﺴﺔ ﺍﻟﻔـﺭﻭﺽ ﺍﻻﻴﺠﺎﺒﻴـﺔ‬
‫ﻟﻠﺨﺼﺎﺌﺹ ﺍﻻﺠﺘﻤﺎﻋﻴﺔ‪-‬ﺍﻻﻗﺘﺼﺎﺩﻴﺔ ﻟﻠﻤﺯﺍﺭﻋﻴﻥ ﻭﺍﻟﺘﺠﺎﺭ‪ ،‬ﺘﻜﺎﻟﻴﻑ ﺍﻟﺤﺼﺎﺩ ﺍﻟﻌﺎﻟﻴﺔ ﻭﺍﻟﻔﺎﻗﺩ ﻤﻥ ﺍﻟﻐﺭﺒﻠﺔ‬
‫ﻭﺍﺭﺘﻔﺎﻉ ﺘﻜﺎﻟﻴﻑ ﺍﻟﺘﺭﺤﻴل ﻥ ﻭﺠﻭﺩ ﺍﺤﺘﻜﺎﺭ ﺍﻟﻘﻠﺔ ﻓﻲ ﺍﻟﺴﻭﻕ ﻭﺍﻟﺘﻜﺎﻤل ﺍﻟﻤﺸﺘﺭﻙ ﺒﻴﻥ ﺍﻷﺴـﻭﺍﻕ ﻓـﻲ‬
‫ﺍﻟﺴﻭﺩﺍﻥ ﻭﻤﻊ ﺴﻭﻕ ﺍﻟﺼﺎﺩﺭ‪ .‬ﺠﻤﻌﺕ ﺍﻟﺒﻴﺎﻨﺎﺕ ﺍﻷﻭﻟﻴﺔ ﻟﻠﻤﻭﺴﻡ ‪ 2009/2008‬ﻤـﻥ ﺨـﻼل ﺍﻟﻤﺴـﺢ‬
‫ﺍﻟﻤﻴﺩﺍﻨﻰ ﺒﺎﺴﺘﺨﺩﺍﻡ ﺍﺴﺘﺒﻴﺎﻥ ﻤﻥ ﻋﻴﻨﺔ ﻋﺸﻭﺍﺌﻴﺔ ﺒﺴﻴﻁﺔ ﻤﻥ ‪ 360‬ﻤﺯﺍﺭﻉ )‪ 200‬ﻓﻰ ﻭﻻﻴﺔ ﺍﻟﻘﻀـﺎﺭﻑ‬
‫ﻭ‪ 160‬ﻓﻰ ﻭﻻﻴﺔ ﺸﻤﺎل ﻜﺭﺩﻓﺎﻥ( ﻭ‪ 132‬ﺘﺎﺠﺭ )‪ 59‬ﻓﻲ ﺍﻟﻘﻀﺎﺭﻑ ‪ 43,‬ﻓﻰ ﺍﻷﺒـﻴﺽ ﻭ‪ 30‬ﻓـﻰ‬
‫ﺃﻤﺭﻭﺍﺒﺔ ( ﻭ ‪ 40‬ﻤﺼﺩﺭ )‪ 18‬ﻓﻰ ﺍﻟﻘﻀﺎﺭﻑ ﻭ ‪ 11‬ﻓﻰ ﺍﻷﺒﻴﺽ ﻭ‪ 6‬ﻤـﻥ ﻤﺨﺘﻠـﻑ ﺍﻟﻭﻻﻴـﺎﺕ (‪.‬‬
‫ﺠﻤﻌﺕ ﺃﻴﻀﹰﺎ ﻤﻌﻠﻭﻤﺎﺕ ﺜﺎﻨﻭﻴﺔ ﻤﻥ ﺍﻟﻤﺼﺎﺩﺭ ﺍﻟﺭﺴﻤﻴﺔ‪ .‬ﺓ ﺍﺴﺘﺨﺩﻡ ﺍﻟﺘﺤﻠﻴل ﺍﻟﻭﺼـﻔﻰ‪ ,‬ﻭ ﺍﻟﻬـﻭﺍﻤﺵ‬
‫ﺍﻟﺘﺴﻭﻴﻘﻴﺔ‪ ,‬ﻭﺍﻟﻤﻴﺯﺍﻨﻴﺔ‪ ,‬ﻭ ﻤﺼﻔﻭﻓﺔ ﺘﺤﻠﻴل ﺍﻟﺴﻴﺎﺴﺎﺕ‪ ,‬ﻭﺘﺤﻠﻴل ﺍﻟﺯﻤﺎﻥ ﻭﺍﻟﻤﻜﺎﻥ ﻟﻸﺴـﻌﺎﺭ‪ .‬ﺍﻥ ﻤﺼـﺭ‬
‫ﻫﻰ ﺃﻜﺒﺭ ﺩﻭﻟﺔ ﻤﺴﺘﻭﺭﺩﺓ ﻟﻠﺴﻤﺴﻡ ﻤﻥ ﺍﻟﺴﻭﺩﺍﻥ ﺨﻼل ﺍﻟﻔﺘﺭﺓ ﻤﻥ ‪ 2000‬ﺍﻟـﻰ ‪ ، 2009‬ﻭﺍﻥ ﻨﺴـﺒﺔ‬
‫ﺴﻌﺭ ﺍﻟﻤﺯﺍﺭﻉ ﺒﻠﻐﺕ ﻨﺤﻭ ‪ %75‬ﻓﻲ ﺍﻟﻤﺘﻭﺴﻁ ﻤﻥ ﺴﻌﺭ ﺍﻟﺼﺎﺩﺭ )ﻓﻭﺏ( ‪ ،‬ﻭ ﺃﻥ ﻨﺴـﺒﺔ ﻤﺴـﺎﻫﻤﺔ‬
‫ﻫﺎﻤﺵ ﺍﻟﺘﺴﻭﻴﻕ ﻟﻠﻤﺼﺩﺭﻴﻥ ﻓﺎﻗﺕ ﺍﻟﻬﺎﻤﺵ ﺍﻟﺘﺴﻭﻴﻘﻰ ﻟﺘﺠﺎﺭ ﺍﻟﺘﺠﻤﻴﻊ ‪ .‬ﻭﺠﺩﺕ ﺍﻟﺩﺭﺍﺴـﺔ ﺃﻴﻀـﺎ ﺇﻥ‬
‫ﻫﻨﺎﻟﻙ ﺍﺤﺘﻜﺎﺭ ﻗﻠﺔ ﺒﻴﻥ ﺍﻟﺘﺠﺎﺭ ﻭﺍﻟﻤﺼﺩﺭﻴﻥ ﻟﻠﺴﻤﺴﻡ ﻓﻲ ﺍﻷﺴـﻭﺍﻕ ﺍﻟﺜﻼﺜـﺔ ﻭﺴـﻭﻕ ﺍﻟﺼـﺎﺩﺭ ﻭﺃﻥ‬
‫ﻤﺤﺼﻭل ﺍﻟﺴﻤﺴﻡ ﻜﺎﻥ ﻤﺭﺒﺤﺎ ﺒﺎﻟﺭﻏﻡ ﻤﻥ ﺍﺭﺘﻔﺎﻉ ﺘﻜﺎﻟﻴﻑ ﺍﻟﺤﺼﺎﺩ ﻭﺍﻟﻔﺎﻗﺩ ﻤﻥ ﺍﻟﻐﺭﺒﻠﺔ ﻭﺍﻟﺘﺭﺤﻴل ﻓـﻰ‬
‫ﺃﻨﺸﻁﺔ ﺇﻨﺘﺎﺝ ﻭﺘﺴﻭﻴﻕ ﺍﻟﺴﻤﺴﻡ ‪ .‬ﺃﻅﻬﺭﺕ ﻨﺘﺎﺌﺞ ﻤﺼﻔﻭﻓﺔ ﺘﺤﻠﻴل ﺍﻟﺴﻴﺎﺴﺎﺕ ﻤﻭﻗﻑ ﺍﻟﺴﻭﺩﺍﻥ ﺍﻟﺘﻨﺎﻓﺴـﻲ‬
‫‪v‬‬
‫ﻓﻰ ﺼﺎﺩﺭﺍﺕ ﺍﻟﺴﻤﺴﻡ ﺒﺎﻟﺭﻏﻡ ﻤﻥ ﻭﺠﻭﺩ ﻀﺭﺍﺌﺏ ﻀﻤﻨﻴﺔ ﻭﻅﺎﻫﺭﺓ ﻭﺍﻟﺘﻲ ﻗﺩ ﻻ ﺘﺤﻔﺯ ﺍﻟﻤـﺯﺍﺭﻋﻴﻥ‬
‫ﻭﺍﻟﺘﺠﺎﺭ ﻋﻠﻰ ﺍﻟﺴﻭﺍﺀ ‪ .‬ﺃﺸﺎﺭﺕ ﺍﻟﻨﺘﺎﺌﺞ ﺃﻴﻀﺎ ﺇﻟﻰ ﻋﺩﻡ ﺍﺴﺘﻘﺭﺍﺭ ﺍﺴﻌﺎﺭ ﺍﻟﺴﻤﺴﻡ ﻜﻤﺎ ﺨﻠﺹ ﺍﻟﺘﺤﻠﻴـل‬
‫ﺍﻟﺯﻤﺎﻨﻰ ﻭﻭﺠﻭﺩ ﺘﻜﺎﻤل ﻤﺸﺘﺭﻙ ﺒﻴﻥ ﺃﺴﻭﺍﻕ ﺍﻟﺼﺎﺩﺭ ﻭﺍﻷﺴﻭﺍﻕ ﺍﻟﻤﺤﻠﻴﺔ ﻓﻲ ﺍﻟﻤﺩﻯ ﺍﻟﻁﻭﻴل‪ .‬ﺍﻭﺼـﺕ‬
‫ﺍﻟﺩﺭﺍﺴﺔ ﺒﺘﺨﻔﻴﺽ ﺘﻜﻠﻔﺔ ﺇﻨﺘﺎﺝ ﺍﻟﺴﻤﺴﻡ ﺒﺘﺭﺒﻴﺔ ﺃﺼﻨﺎﻑ ﺫﺍﺕ ﺜﻤﺎﺭ ﻻ ﺘﺸﺘﺕ ﺍﻟﺒﺫﻭﺭ ﺃﻭ ﺘﻨﻀﺞ ﻓﻰ ﻭﻗﺕ‬
‫ﻗﺼﻴﺭ ﻋﻠﻰ ﺍﻟﻨﺒﺎﺕ‪ .‬ﻭﺘﻘﻠﻴل ﺘﻜﻠﻔﺔ ﺍﻟﺘﺴﻭﻴﻕ ﺒﺈﺩﺨﺎل ﻋﻤﻠﻴﺔ ﺍﻟﻐﺭﺒﻠﺔ ﻓﻲ ﻤﻨﺎﻁﻕ ﺍﻹﻨﺘـﺎﺝ ﻟﺘﻘﻠﻴـل ﻓﺎﻗـﺩ‬
‫ﺍﻟﻐﺭﺒﻠﺔ ﻭﺘﺤﺴﻴﻥ ﺍﻟﺒﻨﻴﺎﺕ ﺍﻟﺘﺤﺘﻴﺔ ﻟﺘﻘﻠﻴل ﺘﻜﻠﻔﺔ ﺍﻟﺘﺭﺤﻴل‪ .‬ﻜﻤﺎ ﺃﻭﺼﺕ ﺍﻟﺩﺭﺍﺴﺔ ﺒﺘﻁﺒﻴﻕ ﻟﻭﺍﺌﺢ ﺍﻟﺘﺴﻭﻴﻕ‬
‫ﻟﻀﻤﺎﻥ ﻜﻔﺎﺀﺓ ﻫﻴﻜل ﻭﺍﺩﺍﺀ ﺍﻟﺘﺴﻭﻴﻕ ﻭﺘﻭﻓﻴﺭ ﺍﻟﺘﻤﻭﻴل ﺍﻟﺘﺴﻭﻴﻘﻲ ﻟﻠﺘﺠﺎﺭ ﻟﺘﺠﻨﺏ ﻤﻤﺎﺭﺴﺎﺕ ﺍﺤﺘﻜﺎﺭ ﺍﻟﻘﻠﺔ‬
‫ﻭﻟﺘﺄﻜﻴﺩ ﺠﻭﺩﺓ ﺇﻨﺘﺎﺝ ﺍﻟﺴﻤﺴﻡ ﻟﺯﻴﺎﺩﺓ ﺼﺎﺩﺭ ﺍﻟﻤﺤﺼﻭل ﻤﻥ ﺍﻟﺴﻭﺩﺍﻥ‪.‬‬
‫‪vi‬‬
List of Contents
Dedication I
Acknowledgment Ii
Abstract English Iii
Abstract Arabic V
List of contents Vii
List of table Xiii
List of figure Xvii
Abbreviations Xviii
CHAPTER ONE 1
1.0. Introduction 1
1.1. Importance of Sesame production in the world and Sudan 1
1.2. Importance of sesame exports in the world and Sudan 5
1.3. Problem statement 10
1.4. The objectives of the Study 11
1.5. Hypotheses to be tested 12
1.6. Data Collection 12
1.7. Methods of analysis 13
CHAPTER TOW: Literature review 15
2.0. Introduction 15
2.1. Marketing channel 15
2.1.1. Distribution channel 15
2.1.2. The role of marketing channel 15
vii
2.1.3. Marketing costs are defined to include three types these are:- 16
2.1.4. Marketing margins 16
2.1.5. Marketing net margin 16
2.5.6. Gross margin 17
2.2. Market Structure 18
2.2.1. Oligopoly 19
2.3. Briefs on the crop markets of Gadarif, El Obeid and Om Rwaba: 23
2.3.1. Gadarif market 23
2.3.2. El Obeid Market 24
2.3.3. Om Rwaba Market 26
2.4. Market Distortion (Policy Analysis Matrix) 27
2.5. Market Co-integration 29
CHAPTER THREE : Methodology 33
3.1. Method of data collection 33
3.2. Method of data analysis 34
3.2.1. Budget analysis method 34
3.2.1.1. Gross revenue of production 34
3.2.2. Market Structure 35
3.2.2.1. The elements of market structure are 36
3.2.2.2. Definition of competitive and HHI 37
3.2.3. Policy Analysis Matrix (PAM) Method 38
3.2.3.1. The financial (private) profitability 40
3.2.3.2. Measure of economic incentives 41
3.2.3.3. Measure of comparative advantage 42
viii
3.2.3.4. The economic valuation of outputs and inputs 44
3.2.3.5. Calculation of the export parity prices 44
3.2.3.6. Calculation of the import parity prices 45
3.2.4. Temporal and spatial analysis 47
3.2.5. Spatial price analysis method 47
3.2.5.1. Stationarity and unit root test 47
3.2.5.1.1. Definition of non stationary 47
3.2.5.1.2. Testing for stationary 49
3.2.5.2. Co-integration 51
3.2.5.2.1. Johansen co-integration test 53
CHPTOR FOUR : Socioeconomics Characteristics 56
4.1. Age of the respondents 56
4.2. Education 59
4.3. Occupation 62
4.4. Martial status 65
4.5. Experience of production and trade 67
4.6. Type of traders 70
4.7. Source of finance 72
4.8. Direct purchase from producer 76
4.9. The reason behind traders who were not purchasing from 78
producers directly
CHAPTER FIVE: Results and Discussion of Marketing 81
Channel, Cost and Structure, and International Geographical
Destinations Analyses
ix
5.1. Definitions of a market and marketing terms: 81
5.2. Marketing objectives 83
5.3. Marketing Function 84
5.3.1. Physical Handling Function 84
5.3.2. Facilitating function 86
5.3.3. Processing function 87
5.3.4. Exchange function 87
5.4. The marketing channel 87
5.4.1. Producer 87
5.4.2. Assemblers 88
5.4.3. Representatives (Wakeels) 88
5.4.4. Auction market 88
5.5. Marketing margins and costs 91
5.6. Sesame market structure results and discussion 96
5.6.1. Sesame sellers’ concentration in Gadarif 96
5.6.2. Sesame sellers’ concentration in ElObeid 97
5.6.3. Sesame buyers’ concentration in Gadarif 98
5.6.4. Sesame buyers’ concentration in El Obeid 99
5.6.5. Market structure of sesame exporters 100
5.7. Conclusions for market structure, conduct and performance 101
5.8. Geographical destinations of sesame exports 102
CHAPTER SIX : Results and Discussion of the Economic 107
Analysis, Temporal and Spatial Analysis of Sesame Production

and Marketing in Gadarif and North Kordofan States
x
6.1. Budget analyses results of sesame production in Gadarif and North 107
Kordofan States
6.1.1. Production variable costs 107
6.1.2. Total variable cost 114
6.2. Gross Revenue 114
6.2.1. Gross margin revenue 114
6.3 Results and Discussion of the PAM analyses 116
6.3.1. Financial and Economic profits (D, H) 116
6.3.2. Effect of Policy and other Divergence (Market Distortions) 117
6.3.2.1. Competitiveness 119
6.3.2.2. Nominal protection coefficient NPC and effective protection 120
coefficient EPC
6.4. Temporal Data Analysis and Discussion 121
6.4.1. Descriptive Statistic 123
6.4.1.1. Descriptive statistics of FOB prices 123
6.4.1.2. Gadarif prices 125
6.4.1.3. El Obied prices 127
6.4.1.4. Om Rawaba prices 129
6.4.2. The coefficient of variation CV 131
6.4.3. Price time series analysis 132
6.5. Spatial Analysis Result and Discussion 137
6.5.1. The result of a unit root tests 137
6.5.2. Johansen Co-integration results 138
6.5.3. Error correction model (ECM) 140
6.5.4. Vector Error Correction model 145
CHAPTER SEVEV : Summary and Conclusions, Recommendations of the
xi
Study
7.0. Summary 146
7.1. The method of the study 146
7.2. The results of the study 147
7.3. Conclusions of the study 151
7.4. The recommendations of the study 153
References 154
Appendices 163
xii
List of Table
Page
Table: 1.1 Average Area Planted, Production and Productivity of sesame 2
by Competitive Countries in the World (2000 - 2005)
Table 1.2 Research and Farmers Yields for Sesame (Kg / feddan) 5
Table 1.3 percentage Share of the largest five exporting countries of sesame 6
in the world
Table 1.4 Performance of sesame exports out of total Sudan’s non-oil 8
exports and FOB price during 2000-2009
Table 2.1 Concentration ratios in selected American manufacturing 22
industries, 1972
Table 3.1 Policy Analysis Matrix (PAM) 39
Table 4.1 Age distribution of Gadarif state producers 56
Table 4.2 Age distribution of North Kordofan state producers 57
Table 4.3 Age distribution of Gadarif traders 57
Table 4.4 Age distribution of ELObeid traders 58
Table 4.5 Age distribution of OMrawaba traders 58
Table 4.6 Education distribution level of Gadarif producers 60
Table 4.7 Education distribution level of North Kordofan state producers 60
Table 4.8 Education distribution of Gadarif traders 61
Table 4.9 Education distribution of ELObeid traders 61
Table 4.10 Education distribution of OMrawaba traders 62
Table 4.11 Occupation distribution of Gadarif state producers 63
Table 4.12 Occupation distribution of North Kordofan state producers 63
Table 4.13 Occupation distribution of Gadarif traders 64
xiii
Table 4.14 Occupation distribution of ELObeid traders 64
Table 4.15 Occupation distribution of OMrawaba traders 64
Table 4.16 Marital status distribution of Gadarif state producers 65
Table 4.17 Marital status distribution of North Kordofan state producers 66
Table 4.18 Martial status distribution of Gadarif traders 66
Table 4.19 Martial status distribution of El Obeid traders 66
Table 4.20 Martial status distribution of Om Rawaba traders 67
Table 4.21 Period distribution of sesame cultivation of Gadarif State 67
producers
Table 4.22 Period distribution of sesame cultivation of North Kordofan 68
State producers
Table 4.23 Experience distribution in trade by Gadarif traders 68
Table 4.24 Experience distribution in trade by El Obied traders 69
Table 4.25 Experience distribution in trade by Om Rwaba traders 69
Table 4.26 Distribution of type of trade of Gadarif traders 70
Table 4.27 Distribution of type of trade of El Obeid traders 71
Table 4.28 Distribution of type of trade of Om Rwaba traders 71
Table 4.29 Distribution of finance by type for Gadarif State producers 73
Table 4.30 Distribution of finance by type for North Kordofan State 74
producers
Table 4.31 Distribution of finance by type for Gadarif traders 75
Table 4.32 Distribution of finance by type for El Obied traders 75
Table 4.33 Distribution of finance by type for Om Rwaba traders 76
Table 4.34 Direct purchases from Producers in Gadarif State 77
Table 4.35 Direct purchases from producer in El Obied 77
Table 4.36 Direct purchases from Producer in Om Rwaba 78
xiv
Table 4.37 Reasons for traders who were not purchasing from producers 79
directly in Gadarif
directly in El Obied
directly in Om Rwaba
Table 5.1 Marketing costs of sesame in Gadarif, El Obeid and Om Rwaba 93
markets (SDG/Ton)
Table 5.2 prices and farmers, Assemblers and exporters share of sesame 95
in Gadarif and El Obeid and Om Rwaba markets from FOB
price for the season 2008/09
Table 5.3 Sesame sellers’ concentration ratio in Gadarif 97
Table 5.4 Sesame sellers’ concentration in El Obeid Market 98
Table 5.5 Sesame buyers’ concentration in Gadarif 99
Table 5.6 Sesame buyers’ concentration in El Obeid 100
Table 5.7 Exporters concentration in Sudan 2009 101
Table 5.8 Relative share of Sudan sesame exports according to groups of 103
import countries during the period during 2000-2009
Table 5.9 Average exports value of sesame from Sudan by different 105
countries during the period (2000-2009)
Table 6.1 Estimated returns and cost of sesame Production for Gadarif 108
(SDG/feddan)
Table 6.2 Estimated returns and cost of sesame Production for North 109
Kordofan (SDG/feddan)
Table 6.3 Comparison of farmer production costs and net margin 115
of sesame in the production areas (2008-2009)
xv
Table 6.4 Financial and economic profitability of sesame production in 116
SDG/feddan in Gadarif and North Kordofan states
Table 6.5 Transfers of sesame production in Gadarif and North Kordofan 118
States (SDG/feddan)
Table 6.6 Competitiveness of sesame production and exports in Gadarif 120
and North Kordofan states
Table 6.7 Implicit and direct taxes on sesame crop in Gadarif and North 121
Kordofan states
Table 6.8 Sesame FOB price (US$/Ton) for 2000-2009 124
Table 6.9 Sesame Gadarif local prices (SDG/Kantar) from (2000-2009) 126
Table 6.10 Sesame El Obied local prices (SDG/kantar) from (2000-2009) 128
Table 6.11 Sesame Om Rwaba local prices (SDG/kantar) from (2000- 130
2009)
Table 6.12 Comparison of prices coefficient of variation (C.V.) within 131
years for the selected markets
Table 6.13 Regression equations for the prices 132
Table 6.14 Statistical and critical values for the ADF and PP for the 138
selected variables (2000-2009)
Table 6.15 Johansen co-integration test for FOB, GP, OBP, and OMP 140
prices
Table 6.16 Vector Error Correction results for FOB prices 142
Table 6.17 Short and long run elasticity 143

Table 6.18 Vector Error Correction results for Gadarif prices 143
Table 6.19 Vector Error Correction results for El Obied prices 144
Table 6.20 Vector Error Correction results for Om Rawaba prices 145
xvi
List of Figure
Page
Figure 1.1 Production of sesame of Sudan , Gadarif and North Kordofan 4
1990-2008
Figure 1.2 Exports of sesame of Sudan in quantities and value during 1990- 9
2009
Figure 5.1 Marketing channel of sesame in Sudan 90
Figure 5.2 Trends of selected Arab countries importing sesame from Sudan 106
during 2000-2009.
Figure 6.1 FOB, GP, OBP, and OMP sesame prices (Jan.2000-Dec.2009) 122
Figure 6.2 FOB Prices Fluctuations and trend 133
Figure 6.3 Gadarif Prices Fluctuations and trend 134
Figure 6.4 El Obied Prices Fluctuations and trend 135
Figure 6.5 Om Rawaba Prices Fluctuations and trend 136
xvii
Abbreviations
Hectare: 2.38 feddans (10000 square meters)
One feddan : 4200 square meters
Kantar : 45 kilogram
Fed : feddan
FB : FOB price
GP : Gadarif price
OBP : El Obeid price
OMP : Om Rawaba price
xviii
CHAPTER ONE
Introduction
1.0. Introduction:
The agricultural sector is a major contributor to Sudan economy as it
provided an average share of about 31.1% of the country’s Gross Domestic
Product (GDP), and over 80% of non-oil export revenue proceeds in
2008/09 (Bank of Sudan, 2009). Also it produced the national food
requirements and employed more than 55% of the labor force in the country
(Ministry of Agriculture, 2008). Agriculture provides most of the raw
material for local manufacturing industries of sugar, textiles and vegetables-
edible oils. Sesame production is a major oil crop produced in Sudan under
mechanized and traditional rain-fed system for domestic consumption in
form of edible oil and confectionary products, and for export as a raw
material.
1.1. Importance of sesame production in the world and Sudan
Sesame indicum L. is an oil seed crop, with oil contents varying between
40% and 60% according to crop variety. Sesame crop belongs to the tropical
climatic zone; it is largely grown in India, China, Mynemar, and Sudan
(table 1-1). China is the largest producer of sesame in the world, which
contributes about 21.4% on average of total world sesame production, and
has the highest area productivity, about 10000 kg per hectare on average.
Area wise, India has the largest area cultivated by sesame in the world
accounting for about 23.6% on average of world sesame area. These four
countries produced about 63.4 percent of world sesame during the 2000-
2005.
Table (1.1): Average area planted, production and productivity of
sesame by competitive countries in the world (2000 - 2005)
Country Average Share of Average of Share of Average of Share of
area world production world productivity world
(Million area (%) (000 Ton) producti (Kg/Hectare) export (%)
Hectares) on (%)
China 0.7 9.7 756 21.1 10000 11.4
India 1.7 23.6 651.1 20.7 3500 23.1
Myanmar 1.3 18.1 453.8 14.5 3500 5.5
Sudan 1.6 22.2 270.8 7.1 1700 23.2
Ethiopia - - - - - 6.9
Share in 7.2 73.6 3100 63.4 70.1
world
Source: General Administration for Agricultural Economics and Planning, Ministry of
Agriculture and Forestry, Sudanese trade point .
Sesame is grown in Sudan under rainfall in mechanized and traditional
production systems of the central clay plains (Gadarif and Blue Nile States)
and on clay and qoz lands of western Sudan (Kordofan and Darfur States).
Sesame production in Sudan is characterized by high variability of
production (Figure 1.1). According to the Ministry of Agriculture and
Forestry the main underlying causes of such performance were attributed to
the following factors:
i) Shattering variety of sesame seeds results in high crop losses during
harvest period,
ii) Alleged deterioration of soil caused by continuous mono-cropping of
sorghum in large areas with little crop land for sesame and absence of fallow
periods,
iii) Heavy infestation of pests and diseases.
iv) Unreliable rainfall resulting in improper sowing dates,
v) Shortage in labor supply for harvest,
vi) High costs of production,
vii) Inadequate supply of research and extension services,
viii) Price fluctuation of sesame crop in Gadarif and El Obied markets
(annex table 1.4).

Fig. (1.1): Production of sesame of Sudan, Gadarif, and North Kordofan
(1990-2008)
Source: Annex tables 1.1, 1.2, 1.3, and 1.4.

Many arguments were offered to explain the decline in productivity. A study
at Tozi research station in the 1950’s showed that if sesame was sown in the
same piece of land for 3 consecutive years the crop yield would fall by 50%.
Given the research conducted in Sudan a large gap exists between sesame
crop yields achieved in research-field trials and those actually produced by
farmers. Table (1.2) compares the research and farmer yields for sesame.
Table (1.2): Research and farmers yields for sesame (Kg / feddan)
Area Research Yield Farmer Yield Farmer Yield as Percentage
of Research Yield (%)
Gadarif 153 92 60
Kordofan 242 74 31
Blue Nile 101 86 85
Source: Compiled from Agricultural Research Corporation Technical Reports (2000).
Also look annex tables 1.1, 1.2 and 1.3
1.2. Importance of sesame exports in the world and Sudan
Table 1.3 gives the five largest countries exporting sesame in the world
(about 65.3% of total world exports) during 2000-2008. India was the largest
exporter of sesame as it contributed about 24.2% of total world exports
during the same period. Sudan is also one of the largest exporters of sesame
in the world, ranking second as it exported about 124000 tons annually on
average (about 18.3% of total worlds exports).

Table (1.3): Percentage share of the largest five exporting countries of sesame in
the world
Country 2000 2001 2002 2003 2004 2005 2006 2007 2008 Average
Sudan 27.8 24.6 21.8 14.6 25.5 14.1 17.3 8.6 10.3 18.3
India 23.9 29.5 16.6 25.4 20.9 20.1 24.8 29.5 27 24.2
China 13.5 9.2 13.8 14.0 6.7 7.2 6.7 5.3 5.1 9.1
Ethiopia 4 2 9.6 9.6 9.5 20.5 19.3 12.3 12.9 11.1
Myanmar 4.5 1.8 0.5 5.6 5.2 2.4 2.6 4.5 5.7 3.6
Total 73.7 67.1 62.3 69.2 67.8 62.2 70.7 60.2 61 65.3
Source: Bank of Sudan (2009) and Sudan Trade Point
However, since 2003, except for some years, the exports of sesame of Sudan
began to drop continuously; Ethiopia, for example, substituted Sudan rank
since 2005.
Sudan sesame exports contributed about 23.6% of its total non-oil exports
revenue during 2000-2009 (Table 1.4). Despite such high share, it appeared
that the variation in sesame production and changes in world prices had their
toll on sesame exports and values of Sudan (Figure 1.2).
For example it was reported by Bank of Sudan that the drop of sesame
exports from 155000 tons in 2002 to 109000 tons in 2003 was mainly due to
the respective drop in production. The drop in sesame production in that
season was about 55% compared to the previous season simply because of
reduction in sesame area planted by 41% (from 4739 thousand feddans down
to 2781 thousand feddans) as a result of shortage in rainfall.
Another example depicted by the decreasing quantity of export from about
111.8 thousands tons in 2007 to about 96.7 thousands tons in 2008 (by
13.5%), and the increasing value from US$ 92.8 million to US$ 141.8
million (by 52%) brought about by the soaring world prices. From the
figure the exports in terms of quantity and value depict high variability
pattern during 1990-2009.

Table (1.4): Performance of sesame exports out of total Sudan’s non-oil
exports and FOB price during 2000-2009
Total non oil Share of sesame
Sudan Export export value out
Value Average FOB value (US$ of total non-oil
Exports (US$ Price million) Sudan exports
Year (000 Ton) million) (US$/Ton) value (%)
2000 212.784 146.620 689.1 456.0 32.21
2001 183.084 104.490 570.7 322.0 32.45
2002 155.393 74.575 479.9 438.3 17.07
2003 108.7 74.400 684.2 494.5 15.05
2004 218.336 178.642 818.2 677.3 26.37
2005 154.675 118.575 766.6 636.9 18.62
2006 219.047 167.039 762.6 569.4 29.33
2007 111.798 92.787 830.0 460.7 20.14
2008 96.744 141.846 1466.2 576.4 24.60
2009 137.659 143.352 1041.4 702.4 20.42
Mean 159.82 124.23 810.9 533.39 23.63
Standard deviation (Stdev) 46.80 37.02 275.96 120.02 6.29
Coefficient of 0.30 0.225 0.266
variation.(C.V.) 0.29 0.34
Source: Central Bank of Sudan. Annual Foreign Trade Statistical Digest

Fig (1.2): Exports of sesame of Sudan in quantities and value during
1990-2009
Source: Annex table (1.5)

1.3. Problem statement:-
Based on data given above and studies referenced below, sesame production
of Sudan is an important cash crop in both the domestic and export markets.
Sudan exported about 18% of total world sesame exports during 2000-2008.
The share of sesame value in Sudan total non-oil exports revenue accounted
to 23% on average during 2000-2009. However, the performance of sesame
production and exports were not stable during those years implying high
dependence on climatic factors and weaknesses in economic policies.
The effects of both the climate and the economic policies were reflected in
domestic low and declining productivity, high marketing cost and margins,
transportation costs and high physical losses of crop (El Shafie and Hag
Saeid, 2006). The effect of economic policies was manifested in government
market distortion brought about by both macro-economic and trade policies.
Inadequate finance and credit, for producers and traders and poor quality of
sesame result lower prices, while high fees increase cost of marketing of
sesame. The fluctuations of sesame prices in the domestic market affected
the amount of sesame produced and exported. Marketing sesame has been
concentrated in a few hands, which created market structure that is not
conducive to competitiveness and delayed the long overdue improvement in
the marketing system (Babiker, personal). The fluctuations of sesame prices
constituted one of the main problems that faced the economics of sesame
production and marketing (Ministry of Agriculture and Forestry, 2007). The

rapid appreciation of the Sudanese currency over the past several years has
greatly reduced the local currency price that producers receive when selling
to world markets.
Therefore, the main problems of sesame production and exports are
summarized in variability of production and exports probably due to
dependence on amount and distribution of rainfall, shattering variety of
sesame, poor technology (manual harvesting), changes in domestic and
external prices, high marketing costs, poor infrastructure, an oligopolitic
market structure and market distortion. All these had led to annual
fluctuations in exports, unreliability of supply to export markets and hence a
negative impact on competitiveness.
1.4. The objectives of the Study:
The main objective of this study is to assess the economic factors affecting
sesame production, marketing and exports.
The specific objectives include:
To evaluate the effect of socio-economic factors on production and
marketing of sesame in Gadarif and North Kordofan states.
• To identify the marketing channel of sesame market and estimate the
gross marginal for farmers and traders.
• To investigate the market structure of sesame trade in the two states
and its impacts on competitiveness.

• To analyze temporal and spatial sesame prices in the export and
domestic markets,
• To assess the effect of market distortions on sesame production and
export of Sudan.
1.5. Hypotheses to be tested:
• Socio-economic characteristics had differential effect among sesame
producers and traders in both areas,
• Harvesting costs represented the highest share of total cost of sesame
production.
• Crop physical losses and transportation costs represented the highest
items in marketing costs.
• Marketing structure is conducive to trade competition.
• Markets of sesame in Sudan are co-integrated.
• Undervalued exchange rate had a positive effect on sesame exports
revenue.
1.6. Data Collection:-
The primary data were collected from producers, and trader exports through
a field survey by means of questionnaire and direct interviewing of the
respondents based on random sampling for the producers.
The sample size was 360 producers, (200 respondents from Gadarif state
and 160 respondents from North Kordofan), 132 traders, (59 respondents
from Gadarif, 43 respondents from El Obeid), and 30 respondents from Om
Rwaba, the exporters were 40 , 18 exporters from Gadarif, (11 exporters
from Elobeid , 5 exporters from Om Rwaba and 6 exporters from different
states).
The field survey was conducted in October 2008 after post harvest to
December 2009,
Secondary data including time series data were collected and used to provide
background information. (Statistics of sesame (quantities and prices) were
used for temporal analysis and co integration among Port Sudan, Gadarif, El
Obeid, Om Rwaba and markets. It will be obtained from different sources
like Ministry of Agriculture and Fish, Ministry of Foreign Trade, Sudanese
Trade Point, and Bank of Sudan.
1.7. Methods of analysis:
1.7.1. The primary data of the selected markets, including the socio
economic characteristics of the respondents, are subjected to descriptive
statistical analysis to show their frequencies, distribution according to states,
the various sesame marketing costs and to calculate costs and margins.
Using budget analysis, the expected feddans under crops are evaluated and
the productivity and production are estimated. Then the revenue and costs
were calculated and the gross margin is calculated by deducting total
revenue minus the total variables costs.

1.7.2. The concentration ratio and descriptive analysis were used to measure
marketing structure.
1.7.3. The secondary data of prices time series of selected markets were
subjected to temporal and spatial analyses.
1.7.3.1. Temporal analysis is used to determine price and to explain trend of
price behavior through time.
1.7.3.2. The spatial time series analysis for the same mentioned markets
were used to measure co-integration between domestic and export markets
(FOB prices).
1.7.4. The Policy Analysis matrix (PAM) was used to test sesame
competitiveness in international markets. And to estimate the extent of
market prices deviations from the economic price levels which in effect
gives indication of the extent of the market distortion and degree of
misallocation of resources.
CHAPTER TWO
Literature Review
2.0. Introduction:
This chapter embarks on the literature review of marketing channels,
marketing cost and market structure. Policy analyses matrix and market co-
integration.
2.1. Marketing channel:-
2.1.1. Distribution channel
It is the pipeline' through which goods and services flow in one direction
(from vendor to the consumer), and the payments generated by them flow in
the opposite direction (from consumer to the vendor). A distribution channel
can be as short as being direct from the vendor to the consumer or may
include several inter-connected (usually independent but mutually
dependent) intermediaries such as wholesalers, distributors, agents, retailers.
Each intermediary receives the item at one pricing point and moves it to the
next higher pricing point until it reaches the final buyer. Also called channel
of distribution or marketing channel (Dictionary.com)
A channel of distribution is a group of individuals and organization that
direct the flow of products from producers to consumers.
2.1.2. The role of marketing channel is to
• link producers and buyers,
• Performs sales, advertising and promotion,

• Influences the firm's pricing strategy,
• effect product strategy through branding,
2.1.3. Marketing costs are defined to include three types these are:-
1. Direct costs, which include cost incurred directly as a result of
providing certain marketing services e.g. handling, transportation,
processing, taxes and storage.
2. Operating capital costs which may be in the form of the actual bank
services or administrative fees paid by a trader for borrowed capital.
3. Values of physical losses were calculated as percentage of the selling
price at the marketing stage.
2.1.4. Marketing margins:
Marketing margins are differences between prices at different level in the
marketing channel. It captures the proportion of the final selling price to
each particular agent in the marketing channel. Thus, it provides linkages
between prices at various levels in the distribution system. Margins that vary
widely among participants refer inefficiency at that level. Response of
marketing margins to price changes is also indicates the efficiency of the
channel (Thaung, 2007).
2.1.5. Marketing net margin:-
The net margin in defined as the amount of money a merchant charged his
customer in addition to the price he paid for the commodity and the total
marketing costs incurred. The net margin equals the difference between the
selling prices and the marketing costs and buying price.
Net margin = Selling price – buying price – marketing costs
Net margin are one of the items of used to examine market performance.
2.1.6. Gross margin:-
Gross margin defined as a company’s total sales revenue minus its cost of
good sold, divided by the total sales margin represent percent of total sales
revenue the camping retains after incurring the direct costs associated with
producing the goods, and services sold by a camping. The higher the
percentage the more the camping retains on each dollar of sales to service its
other costs and obligations.
Gross margin (%) = (Revenue – Cost) %

Revenue
The profit per unit can be expressed either as a percentage of the cost in
which case it is referred to as mark-up, or as a percentage of the selling price
then it is referred to mark-on or margin.
Farah (1985) measured the marketing margin analysis of sesame, groundnut,
millet, gum Arabic, and sorghum. The result showed that the marketing
margin Ls 32.25 per ton for sesame produces in Gadarif and Ls 40.99 per
ton for groundnut produce in Nyala. The share of the farmer from FOB price
was higher in Gadarif (68%) and lowest in Nyala (60%). The marketing
margin was high due to the high physical losses and the high exporters’ net
margin which represent 24.1% of FOB price. The assembler net margin was
lowest than the exporters. The marketing margin for sorghum was 14.7% of
consumer price in Damazin and 41.04% in Nyala. The marketing margin for
millet was 19.5% of consumer price in El Obeid and 22% in Nyala.
Bashir (2003) conducted the marketing margin analysis of Gadarif sesame,
revealed that the share of the farm gate price from export price over three
years 1998/99 - 1999/2000, and 2000/01 was low (28%, 27%, 24%
respectively).
Egeemy (2010) indicted the marketing margin cost of sesame to be about
23% per ton from FOB price for sesame produce in Gadarif, 13% for El
Obeid, 24% for Sinnar, and 23% for Kosti. The share of the farmer from
FOB price was 70% in Gadarif, 48% in El Obeid, 68% in Sennar , and 69%
in Kosti.
2.2. Market Structure
The term market structure is defined as: A description of the behavior of
buyers and sellers in that market. (Maurice, 1978, Halleem 2001, Baumo
l.1982 and Colton, 1993) said that In economics, markets are classified
according to the structure of the industry. The types of market structures are:
(1) Perfect Competition--many sellers of a standardized product,
(2) Monopolistic Competition--many sellers of a differentiated product,
(3) Oligopoly--few sellers of a standardized or a differentiated product.
(4) Monopoly--a single seller of a product for which there is no close
substitute.
Aperfectly competitive market exists when every participant is a "price
taker", and no participant influences the price of the product it buys or sells.
Specific characteristics may include:
• Large number of buyers and sellers. Infinite consumers with the
willingness and ability to buy the product at a certain price, and infinite
producers with the willingness and ability to supply the product at a
certain price.
• Easy to entry and exit. It is relatively easy for a business to enter or exit
in a perfectly competitive market.
• Prices and quality of products are assumed to be known to all consumers
and producers.
• Buyers and sellers incur no costs in making an exchange (perfect
mobility).
• Firms aim to sell where marginal costs meet marginal revenue, where
they generate the most profit.
• Homogeneous products. The characteristics of any given market good or
service do not vary across suppliers.
2.2.1. Oligopoly:
An oligopoly is a market dominated by a few large suppliers, create barriers
take on a number of the industry. Three characteristics of oligopoly
1- There are a few firms selling a similar product.

2- There are barriers to entry.
3- Firms are interdependent; the actions of one firm will affect the others
in the industry.
(McNulty1968 and Broaddus, 1971) emphasized the importance of market
structure. Broaddus [1991], in his path-breaking research on the market
structure of banking services, argued that "one cannot determine the
structure of a market until the market under consideration is carefully
defined."
Examination of market structure has also been discussed in Preston (`1988).
Furthermore, Forgey, Mullendore, and Rutherford (1997) provided empirical
evidence regarding brokerage firm concentration in a local market multiple
listing service setting over the year 1992-1995. To evaluate the level of
brokerage firm concentration in this market, Gini Coefficients, Herfindahl-
Hirschman Indices and Concentration Ratios for each year of the study
period are calculated. The results indicated that for firms responsible for
listing properties, firm concentration has not varied substantially over the
four-year study period.
Smith (1991) laid the foundation for an economic theory of religious
institutions. Smith emphasized the importance of market structure,
describing in detail the differences between state-sponsored religious
monopolies and competitive religious markets. This article builds on Smith's

discussion both theoretically and empirically. The author formalizes the
concept of a religious market, defends its relevance, and derives predictions
concerning the observable effects of religious market structure. Data on the
religious characteristics of 17 developed, Western nations confirm Smith's
claim that monopoly and government regulation impede religious markets
just as they do secular ones. Across Protestant nations, rates of church
attendance and religious belief are substantially higher in highly competitive
markets than in markets monopolized by established churches.
Empirical study on concentration ratios in selected American Manufacturing
Industries, 1972. (Table 2.1) pp 9 in the Book.
Concentration ratio computed by rank the firms in order of sizes, starting
from the largest in the industry. Starting from the top of the list, published
statistics usually give concentration ratios for the largest 4, largest 8, and
sometimes the largest 20 firms in an industry. In a monopoly industry the
concentration ratio would be 100%, but the concentration ratio for a
competitive industry would have to be very small for the largest 4 firms may
be 5 to 10%. The ratio for an oligopoly would lie between this limit.
Table (2.1): Concentration ratios in selected American manufacturing
industries, 1972:
Industry Total number of Largest 4 Largest 8 Largest 20

companies
Electric lamps 103 90 94 98
Cereal breakfast food 34 90 98 99
Chewing gum 15 87 98 100
Cigarettes 13 84 NA 100
Gypsum products 44 80 93 99
Primary aluminum 12 79 92 100
Tires and inner tubes 136 73 90 98
Metal cans 134 66 79 92
Soap and detergents 577 62 74 85
Cutlery 123 55 67 83
Ball and roller bearings 99 53 73 89
Petroleum refining 152 31 56 84
Bread and related products 2800 29 39 50
Bolts, nuts, rivets 581 16 25 42
Wood kitchen cabinets 1769 12 19 32
Fur goods 797 7 12 23

Source: Bureau of the Census, 1972 Census of Manufactures, Special Report Series,
Concentration Ratios in Manufacturing, MC72(SR)-2 (Washington, D.C., 1975), Table 5.
NA = not available
Caves (1977) analyzed the concentration ratio of cereal breakfast foods in
American Manufacturing industries in 1972 and found the first largest 4
firms had accounted for 90 % of sales while the largest 8 firms had
accounted for 98% of sales. He also found that the largest 4 firms of Tires
and inner tubes had accounted for 73% of sales, and the largest 8 top
represented about 92% of sales. Also indicated that the ratio of the largest 4
Fur firms was 7% and the largest 8 firms was 12%, concluding that the
industry was competitive.
2.3. Briefs on the crop markets of Gadarif, El Obeid and Om Rwaba:
According to the General Administration of the Crop Markets in Gadarif, El
Obeid and Om Rwaba (2009 and 2010). The following information was
given:
2.3.1. Gadarif market:

Gadarif market was establishment in 1930 for marketing of sesame, cotton,
it is affiliated to the Ministry of Finance and Natural Economy, and it is
governed by law.
Types of markets: Markets are divided into two markets,
1) Regulated markets:
Markets are regulated by the law of markets and include and comprise:
(i) Terminal market for crop: the market management of the crops is
undertaken) by the Department of Crop markets it role is to provide multiple
economical and social services the market disposes the products of farmers
in exchange of cash income A large number of producers (sellers) and
dealers and large companies (buyers) interact in the trade of crops, selling,
purchasing, storing and exporting, the marketing season starting of
November and runs until August of next year, Pricing of the crop, takes
place according to the law of supply and demand among producers, traders
and companies through on(auction) process will in case of sesame, Gum
Arabic, Sunflower and maize are traded at the site the market under the
supervision of the market administration and without any interference in
determining prices.
(ii) Markets’ Branches: These markets have been created to facilitate the
marketing process for products between farmers, traders and brokers; they
comprise the following brandies Alhawwath - Bazhurh - Doka - Basendh -
Aborjm and Saraf Ardibp.
2) Unregulated markets (rotary):
These markets are not subject to the law of markets, they are held in specific
days for products obtained from villages,
2.3.2. El Obeid Market:

The crops market is located in down town El Obeid town, the capital of
North Kordofan State.
El Obeid crop market, have been established in 1912 as the largest market
for gum Arabic in the world. In 1929 - 1930 middlemen selling system
changed into the auction system.
A variety of crops are traded in El Obeid market Crops market including:
gum Arabic, sesame, peanut, Roselle, watermelon – sorghum and other
crops.
Crops movement in the market in following ways:
1 / crops brought directly to the market and are offered for sale by auction
system.
2 / commercial crops sent to stores, merchants, companies and banks
3/ crossing crops revised with respect to documents on prices and quantity
specifications.
2.3.2.1. El Obeid market administration arrangements:
Since 1942 and up to date all systems of governance gave attention to
market crops legislations and follow-up procedures. The provinces, Ministry
of Finance, the Legislative Council, and the Federal Ministry of Commerce
were responsible for the development of those legislations. These
legislations and arrangements designed to: -
1/Regulate the relationship between the producer and the merchant and to
the extent that the State supports the effort of each party in the course of his
work.
2/Organize the process of marketing and the revitalization of commercial
competition through auction system,
3/ Provide daily information for all stakeholders

4/Handle all problems arising from relations marketing within the
framework of rules and regulation for collection of fees, Zakat taxes.
5/Activate performance and to tight administrative control of to push
development of the market in line to the progress of trade.
6/Implement quality programs for domestic market crops.
7/Document and develop and update information on crops, size of proceeds,
prices for past years incoming and outgoing quantities
8/Observe the relationship between fees imposed on the crop and resulting
from the smuggling of crops outside the market.
9/Provide working mechanisms and material support required by
municipalities and the Ministry of Finance.
10/Provide services including e-mail, scale average incoming and outgoing
crops.
11/ Encourage electronic trading services
12/ Provide management services, local and global communication to link
the state with other states and the countries of the world.
2.3.3. Om Rwaba Market:

It is one of the largest crop markets in North Ko rdofan. It was established in
1938 for trade of Sesame - beans – gum Arabic - Roselle, which received
from various parts of the state and neighboring states. Since then began to
develop in line to the global exchanges requirements.

2.4. Market Distortion (Policy Analysis Matrix):
Martinez, et al. (2008) used policy analysis matrix and data envelopment
analysis techniques to model the analysis of profitability from farming.
Policy analysis matrices are computed for a sample of rice growers located
in the wetland of the Albufera (Eastern Spain) under observed conventional
and profit-efficient farming conditions. While conventional analysis points
to a lack of profitability, farmers are shown to make positive profits at
private and social prices when data reflecting efficiency adjustments are
used in the analysis. The main conclusion is that the usefulness of the policy
analysis matrix might be substantially enhanced by simulating profitability
after efficiency-improving managerial decisions have been adopted.
Yao (2008) studded the costs and benefits of the Thai agricultural
diversification policy in 1994–96. Three competitive crops (rice, soybeans
and mug beans) are selected in two provinces to study their comparative
advantages in terms of a policy analysis matrix. The results suggest that rice
is more profitable than soybeans and mug beans, implying that government
intervention may incur efficiency losses. Some sensitivity analyses,
however, suggest that potential price changes, increasing water scarcity, and
the effects of crop production on the environment are important concerns
which may justify government intervention.
Islam, (2010) used the policy analysis matrix (PAM) for the period of 2003
to 2005 to determine the policy incentive in terms of protection and

efficiency of production through comparative advantages in the rice sector.
From policy analysis matrix in-line with private/financial profit,
social/economic profit and policy divergences/transfers various protection
coefficients such as NPCO, NPCI, EPC and PC and competitiveness
coefficients such as DRC, was used to measure the level of protection and
comparative advantage in the rice sector of Bangladesh. The results of the
policy transfer and protection coefficients ( NPCO,NPCI, EPC and PCO
criteria) shows that rice production in Bangladesh is subsidized for inputs
(NPCI<1) and taxed for the product/output (NPCO<1).The net effect of
output taxation and input subsidy resulted in a net taxation on value added
(EPC<1) for policy goal of self sufficiency. On the efficiency ground, the
estimated economic profitability criteria and competitiveness indicators
(DRC) demonstrate that Bangladesh has comparative advantage in domestic
rice production for import substitution and its opposite under export parity
situation.
Ramanovich ((2006) show positive and negative influence of the existing
policy and market distortion. On one side, milk producers in Belarus benefit
from cheap domestic resources. At the moment, prices for domestic factors
are 238 thousands Br which is below the social prices level 284 thousands
Br. At the same time through an imperfect economic system, tradable inputs
became more expensive. In the current situation milk producers spend for
tradable inputs 90 thousands Br. In social prices it would be only 74

thousands Br. Also the policy of price determination caused a reduction of
farm revenues from 462 thousands to 370 thousands Br. There are private
and social profitable for inputs and outputs. The benefit under current
situation is much lower than it would be with private prices. Due to
government intervention in the dairy sector and factor markets, the profit
from milk production was 60%. The DRC (0.73) indicate an efficient
utilization of domestic resources in Belarusian dairy sector. Milk production
can be a competitive in private and social prices.
2.5. Market Co-integration
Co-integration theory is definitely the innovation in theoretical econometrics
that has created the most interest among economists in the last decade. The
definition in the simple case of 2 time series xt and yt, that are both
integrated of order one (this is abbreviated I(1), and means that the process
contains a unit root), is the following: Definition: xt and yt are said to be co-
integrated if there exists a parameter β such that Ut = yt – β xt..(Banejee, et
al, 1993).
The concept of co-integration (Granger, 1981) and the methods for
estimating a co-integrated relation or system (Engle and Granger, 1987;
Johansen, 1988, 1991, 1995) gave a framework for estimating and testing for
long run equilibrium relationships between non stationary integrated
variables.
Failure to reject the null of non co-integration implies that the two prices
drift apart in the long run, as they are driven by stochastic trends. In this
case, some changes in one price, say the international market price, may to a
certain extent be transmitted to the domestic market price, however, other
factors, such as policies or deviations from marginal cost pricing determine
the movements of the domestic market price, thus resulting in absence of
market integration, (Fackler and Goodwin, 2001; Barret, 2001, Barret and
Li, 2002, ).
Fackler and Goodwin (2001) refer to the below relationship as the spatial
arbitrage condition and postulate that it identifies a weak form of the Law of
One Price, the strong form being characterized by equality p1t = p2t + c (1).
They also emphasize that relationship p2t - p1t= c (2) represents an
equilibrium condition. Observed prices may diverge from relationship (1),
but spatial arbitrage will cause the difference between the two prices to
move towards the transfer cost.
Rapsomanikis, (2006) In analyzing the wheat market in Egypt, use
logarithmic transformations of monthly commodity wholesale and world
reference prices, in logarithms, from January 1969 to May 2001. The unit
root tests for the 1969-1989 period (not reported) suggest that the Egyptian
and world price of wheat are not co-integrated, whilst those for the period
1989-2001 provide evidence against the null of no co-integration. This
appears broadly consistent with the notion that price transmission and
market integration has arisen after economic reform and the liberalization of
the exchange rate regime. The error correction coefficient suggests that
adjustment is relatively slow with about 7% of the divergence from the long
run equilibrium being corrected each month.
The best way of testing for unit roots is by using the system ML estimator of
Johansen (1988, 1991) is a test for co-integration restrictions in a VAR
representation. \Johansen" estimation is treated in much detail in the book by
Johansen (1995). This estimator also gives you asymptotically efficient
estimates of the co-integrating vectors (the β's) and of the adjustment
parameters (α's) (Sorensen, 2005).
Co-integration between the price series analyzed implies that two prices may
behave in a different way in the short run, but that they will converge toward
a common behavior in the long run. If this property is verified, the
characteristics of the dynamic relationship between the prices can be
described by an Error Correction Model (ECM). Despite a number of
caveats (Barrett and Li, 2002), the short-run adjustment parameter of this
type of model can be interpreted as a measure of the speed of price
transmission, while the long run multiplier can be interpreted as a measure
of the degree of price transmission of one price to the other (Prakash, 1998).
The ADF and Phillips-Perron tests provide evidence for the null of no co-
integration, thus suggesting that the Egyptian and world wheat markets are
not integrated.
Eilev Jansen (undated) and his colleagues at the Bank of Norway, who
successfully applied it to a large econometric model Norway – Timo
Terasvirta, who is from Finland, help develop models that were useful in
non linear formulations of co-integration.
Johansen, et al (2000), Said that co-integration is a means for correctly
testing hypothesis concerning the relationship between two variables having
unit roots (i.e. integrated of order one).
Thaung (2007) investigated the performance and efficiency of marketing
system of chick pea, green gram and pigeon pea in Yangon and Mandalay
markets each selected townships. A study was conducted in Myanmar to
evaluate the spatial market price integration of pulses. The analysis of the
two markets integration was to know the degree of co-movement of prices in
spatially separated market. The assumption was that Mandalay current
wholesale price depend upon the Yangon current wholesale price and taking
one to five lags weekly wholesale price of both Yangon and Mandalay
markets. The percentages of co-integrated can be seen 57% for chick pea,
65% for green gram and 85% for pigeon pea. It can be concluded that there
exist the long-run co-integration for pigeon pea price correlation and
moderately co-integration for both chick pea and green gram within the
Yangon and Mandalay markets.

CHAPTER THREE
Methodology
3.0. Introduction
This chapter gives the method of data collection and analyses. The analyses
included advanced budgeting termed policy analyses matrix (PAM). It
comprises also the method of analyses of market margins, market integration
and market structure.
3.1. Method of data collection

The research used primary and secondary data for analyses. The study
collected primary data through a field survey conducted in Gadarif, El
Obeid, and Om Rawaba markets. The data was collected by a simple random
sample of 532 respondents. The list of producers in each states and the list of
traders in each market were prepared in such away as to enable the survey
team select a representative sample comprising small, medium, and large
producers and traders. A sample size of about 5% of all producers was
randomly selected from each state. All buyers were chosen from each
market, while 50% of the listed sesame exporters in Sudanese Trade Point
and the Chamber of Commerce were also selected. Accordingly the sample
size was 360 producers, (200 respondents from Gadarif state and 160
respondents from North Kordofan), 132 traders, (59 respondents from
Gadarif, 43 respondents from El Obeid, and 30 respondents from Om
Rwaba), the exporters were 40 (18 exporters from Gadarif, 11 exporters

from Elobeid , 5 exporters from Om Rwaba and 6 exporters from different
states).
Although this sampling approach used, the number of producers and traders
included in the survey depended on the availability of resources and
relevance, including time and money.
3.2. Methods of data analyses

The study used several methods of data analyses which included:
3.2.1. Budget Analysis method

The budget analysis was used to decide the profitability of sesame
production in the two states. According to Brown (1982) gross margin
revenue is calculated by subtracting the total variables costs from total gross
revenue.
Gross margin revenue = total revenue – total variable costs.
Gross margin (%) = ((Gross revenue – total variable cost) / Gross revenue)
X 100
3.2.1.1. Gross revenue of production

Gross revenue depend on the average productivity and prevailing price
(price at farm gate) as reported by farmers in survey. The gross revenue is
calculated by multiplying the average productivity by the farm gate price.
Productivity is measured in yield per unit area i.e. in kilogram per feddan.
Productivity in Sudanese agriculture is not high due to many reasons. Some
of these reasons are lack of modern inputs, and insufficient irrigation (Elhaj
1995). Therefore productivity in the traditional and mechanized rainfed sub
sector is low for many reasons. The most important factors involve quantity
and distribution of rainfall and inefficiency of infrastructure and extension
services.
Gross margin of an enterprise is its output less the total variable cost, where
the enterprise output is the total value of the production of the enterprise
(Bernard, and Nix 1973).
El Hadari (1970) attributed the high profit to the high yield or low cost of
production. The margin was highly affected by the cost of production. The
most expensive factors that contributed towards increasing the cost of
production were the weeding and harvesting operations.
3.2.2. Market Structure

The most popular framework used for this purpose turns on htree simple
concepts-market structure, market conduct, and market performance.
Market structure consists of the relatively stable features of the market
environment that influence the rivalry among the buyers and sellers
operating within it. Market conduct consists of the policies that participants
adopt toward the market (and their rivals in it) with regard to their price, the
characteristics of their product, and other terms that influence market
transactions. Market performance is our normative appraisal of the social
quality of the allocation of resources that results from a market’s conduct.

We defined the concentration ratio as a measure of the extent to which the
larger sellers control the bulk of the industry’s sales. Concentration is
merely one element of market structure, the economically significant
features of a market which affect the behavior of firms in the industry
supplying that market.
3.2.2.1. The main elements of market structure are:

1. Seller concentration
2. Production differentiation
3. Barriers to the entry of new firms
4. Buyer concentration
5. Height of fixed costs
6. Growth rate of market demand
Caves (1977) Said “We need a measurement tool which takes account of
both the number and size distribution of firms in a market, yet presents the
result in a form simple enough that it is easy to interpret. The most widely
used device is the concentration ratio.
To compute a concentration ratio, you rank firms in order of sizes, starting
from the largest in the industry. (Size is usually measured in terms of either
sales or employees.) Then Starting from the top of the list, you add up the
percentages for the top x firms. Published statistics usually give
concentration ratios for the largest 4, largest 8, and sometimes the largest 20
firms in an industry. In a monopoly industry the concentration ratio would

be 100%, but the concentration ratio for a competitive industry would have
to be very small for the largest 4 firms may be 5 to 10%. The ratio for an
oligopoly would lie between this limit”.
3.2.2.2. Definition of Competitive and HHI
The United States government classifies markets based on degrees of
competitiveness–competitive, moderately concentrated, and concentrated.
They use an objective measurement, the HHI (Herfindal – Hirschman Index,
sometime called the Herfindal Index), to determine the proper classification
of each market.
Calculating HHI
To calculate the HHI for a market, you take the market share captured by
each company and square it. Then you add up those values to determine an
HHI value.
The US government has declared that markets be classified based on the
following ranges of HHI values:
HHI below 1000 – a competitive market. There are no dominant
competitors in this market.
HHI between 1000 and 1800 – a moderately concentrated market.
HHI above 1800 – a concentrated market. There are one or more dominant
competitors in this market. Higher HHI values translate into fewer, more
dominant competitors.
By the you have addressed more than 50% of the market share, additional
analysis increases the calculate HHI value by less than 0.1% (per additional
competitor.) In one market I analyzed, the top 20 competitors combined had
just fewer than 50% market share. Including the next 50 competitors in the
analysis increased the HHI by 2% (from 219 to 223). You can’t gain any
insight from that difference in value. A good rule of thumb is to only look at
the top10 competitors, or however many it takes to capture 50% market
share.
3.2.3. Policy Analysis Matrix (PAM) Method
According to Monke and Pearson (1989) the main idea of the PAM is the
comparison of financial and economic prices for inputs used in production
and also for the produced goods. Financial prices are prices in observed is a
current situation (prevailing market prices), while economic prices conform
to the situation without any intervention of the government or market
distortions.
The original PAM constitutes a matrix, which contains cost and revenues in
financial and economic prices (table 3.1). The first column of the matrix
represents the revenues economic prices. Total production costs are
separated into tradable inputs (inputs which are tradable on world market)
such as seeds, pesticides, sacks, in the matrix are observed in the second
column. And domestic factors, (non tradable inputs), refer to labor, land,
water; capital; there is no international market for these inputs.

Table (3.1) Policy Analysis Matrix (PAM)
Items Revenues Costs Profits
Tradable Domestic factors
Financial prices A B C D
Economic prices E F G H
Effects of policy and I = A-E J=B–F K=C–G L=D–H=
other divergences I–J–K
A Revenue in financial prices (market prices)
B cost of tradable inputs (such as seeds, sacks and insecticide, etc) in
financial prices
C Cost of domestic factors) labour, land, capital, etc) in financial prices.
D Financial profits. D = A – B – C
E Revenues in economic prices (social, efficiency prices or shadow
prices).
F Cost of tradable inputs in economic prices.
G Cost of domestic factors in economic prices
H Economic profits H = E – F – G
I Output transfers I = A – E
J Input transfers J = B – F
K Factor transfers K = C – G
L Net transfers L = D – H = I – J – K
3.2.3.1. The financial (private) profitability:-
The first row of the fourth column represent financial profits are denoted by
the letter "D" profits, D = Total revenue "A" – total cost (B+C).
The financial profitability calculation show the competitiveness of the
agricultural system, given current technologies, output values, inputs costs
and policy transfers.
A positive financial profits confirms the profitability of the business, also
provide existing firms to increase output. Expansion of existing firms as
well as entry of new firms in the market.
But when the financial profits are negative, operators are earning a
subnormal rate of returns and thus can be expected to exit from this activity
unless something changes to increase profits to at least a normal level.
The second row of the fourth column of the matrix shows economic
(private) profits H = E – F – C. Economic profits are those profits calculated
at efficiency (shadow) prices.
Positive economic profits indicate that there is a positive economic valuation
of output and is an incentive for the expansion of the activities of the firms.
The transfers for differences between the financial valuation and economic
valuation are recorded in third row of the matrix. If market failure does not
exist, then distortions policies cause all divergences between financial and
economic prices of tradable output and inputs.

If output transfers "I" is positive then financial revenues exceed economic
revenues. That is indicated of the government subsiding output prices. But
if the output transfer "I" is negative, then economic revenues are exceeds the
financial revenues. This means that the government is taxing the producers.
The tradables inputs transfers "J" represent the differences between the
financial and economic costs of tradable inputs.
If the tradable inputs transfers "J" is positive then financial costs of inputs is
exceeds the economic costs. In this is means that the government is taxing
the prices of inputs used by farmers. The effect of these taxes is that prices
paid by farmers are greater than the world market prices. But if "J" is
negative, the financial costs in less than the economic costs of tradable
inputs this indicates that the government is subsiding the costs of inputs, in
other words this inputs are sold at prices less than those prevailing
international markets prices.
Domestic factors transfers "K", if K is negative the financial costs of
domestic factors are lower than the economic costs. This means the
government subsidizing the domestic factors. But when the government
taxes the cost of domestic factors, the "K" will be positive.
3.2.3.2. Measures of economic incentives:-
The analysis of economic incentives in the production will use the nominal
protection coefficient (NPC) effective protection coefficients (EPC)as
indicators.
The NPC is the ratio between revenues at financial prices (A) and economic
prices (E). The NPC is use to measure the actual divergences or distortions
between domestic prices and international or border prices of output.
If NPC is more than one it confirms "" the presence of subsidy and implies
positive incentives. On the other hand if NPC less than one shows the
presence of taxes on outputs means the domestic prices is less than the
border prices.
If NPC equal to one means the absence of market failures and implies the
absence of intervention.
Effective production coefficient (FPC) is a more reliable indicator of the
effective incentives than the NPC, as the farmer recognizes that the full
impact of asset of policies includes tradable commodities (inputs and
outputs). EPC is defined as the ratio of value added in financial prices (A-B)
to value added in economic prices (E-F) it measures the impact of protection
on inputs and outputs. Also measures the rate by which domestic value
added exceeds the international value added for any commodity.
3.2.3.3. Measures of comparative advantage:-
Domestic resource cost (DRC) is a measured of comparative advantage and
a measure of economic social opportunity cost of using a domestic resource
in producing, processing, transporting, handling and marketing commodity.
DRC is calculated by dividing the factor cost in economic prices (G) by the
value added in economic (Social) prices (E-F). If DRC is lower than one that
means the commodity is efficient use of domestic resources and the country
has a comparative advantage in producing it.
If DRC is more than one that means the country is not internationally
competitive in the production of the commodity in other world the country is
better off import rather than to produce the commodity because that the cost
of domestic resources used to produce the commodity is more than the
contribution of its value added at economic prices .
If DRC equal one this indicated that (profitability is equal to zero) absence
the comparative advantages.
(i) International value added IVA: is a measure of international
competitiveness and is defined
IVA = Revenue – cost of tradable input
Exchange rate
A positive IVA means positive foreign exchange earnings after bought
tradable inputs.
(ii) Coefficient of international competitiveness (CIC):-
(CIC) is defined as the ratio of domestic resourced costs means used in
economic prices to international value added expressed in foreign currency.
CIC = DRC
IVA
If CIC is lower than the exchange rate the commodity is economically
profitable and vice versa.

3.2.3.4. The economic valuation of outputs and inputs:-
Economic valuation of outputs and inputs is a major segment in the building
process of the Policy Analysis Matrix (PAM). Economic prices in the PAM
are also referred to as efficiency prices (shadow prices). Economic or
efficiency prices demonstrate the opportunity costs of use. World prices of
inputs and outputs are the cornerstone for estimating most of the efficiency
prices.
Idris (1993) said that "for tradable inputs, the accounting prices is the border
prices the marginal import cost, or marginal export revenues as appropriate,
converted to local currency, at the shadow exchange rate. The accounting
price for imports is estimated directly by the CIF value converted into local
currency. To that the additional internal cost items are added after being
valued at accounting prices (the results is the import parity price). For
exportable commodities the accounting price is estimated by FOB value
converted into local currency.
The internal marginal costs items represent decreased revenue to the
producer. Hence, they are deducted from the FOB value after being
decomposed and converted into accounting prices (the result is export parity
price).
3.2.3.5. Calculation of the export parity prices
FOB world price US $/ton at Port Sudan X Shadow Exchange Rate
= World price (SDG/Ton)

(Export Border Parity Price) - Local dealer, Marketing and Transport cost
= World Price at Farm gate (farm-gate export parity)
3.2.3.6. Calculation of the import parity prices:
FOB world price at leading export location + Transportation cost to port of
entry = CIF world price Port Sudan X Shadow Exchange Rate = World price
Port Sudan (Import Border Parity Price) + Local dealer, Marketing and
Transport cost = World Price at Farm (Farm gate import parity price).
3.2.3.6.1. Economic price of tradable:-
Farm gets prices calculated for tradable in the following way:-
The FOB price obtain in the case of exported items in US$ and the CIF price
in the case of imported items.
To obtain the farm gate price the border prices (CIF or FOB) are adjusted for
transportation costs between the location of the farm and the border of entry.
The shadow exchange rate is used for calculation the real value of the
tradable output and input.
The shadow exchange rate is estimated according to the World Bank
methodology.
Shadow exchange rate = market exchange rate (1-T) + official exchange rate
(T).
1-T= Transaction at market exchange rate
T = Transactions at official exchange rate.

An over valued exchange rate inflicts and implicit tax producer of tradable
exportable commodities. Over valuation reduced the competitiveness of the
local producers in international markets because they are partially being
taxed. On the other hand under valued exchange rate or under valuation
increases the competitiveness of the local producers in the international
markets.
The economic (Social) exchange rate may differ from the official exchange
rate. In the PAM model, this distortion in the exchange rate is actually
corrected once border prices are converted to domestic prices at the
economic exchange rate (equilibrium exchange rate) rather than at the
official exchange rate.
3.2.3.6.2. Economic price of domestic factors:
1- Shadow price of labour can be calculated by it opportunity cost that
means it estimated by the border price of its wages average marginal product
in alternative uses.
2- Shadow price of land can be estimated by its opportunity cost or by the
rented value, furthermore can be estimated by its economic profit per cent
area of the best alternative corp.
3- Shadow price of capital
Economic price of capital is estimated by the real rate of interest which
calculated as:-
The real rate of interest = 1 + the interest rate -1
1 + inflation rate
3.2. 4. Temporal and spatial analyses
3.2.5. Spatial Price Analysis Method:
3.2.5.1. Stationarity and unit root test:-
1- The stationarity or other wise of series can strongly influence its behavior
and properties e.g. persistence of shocks will be infinite for non-stationary
series.
2- Spurious regression – if two variables are trending over time, a regression
of one on the other could have a high R2 even if the two are to tally
unrelated.
3.2.5.1.1. Definition of non-stationary:
The simplest stochastic trend model is:
Yt = Yt −1 + u t (1)
Or ∆Yt = u t (2)
This concept can be generalized to consider the case where the series
contains more than one unit root. That is we would need to apply the first
difference operator, ∆, more than once to induce stationary. If non-stationary
series, Yt must be differenced d times before it becomes stationary then it is
said to be integrated of order d, written Yt ~ 1(d). So if Yt ~ 1(d) then ∆d Yt
~ 1(0)
An 1(0) series stationary series
An 1(1) series is contains one unit root,
e.g. Yt = Yt −1 + u t
An 1(2) series contains two unit roots and so would require differencing
twice to induce stationary.
1(1) and 1(2) series can wander along way from their mean value and rarely
cross this mean value.
1(0) series should cross the mean frequently.
The majority of economic and financial series contain single unit root,
although some are stationary and consumer prices have been argued to have
2 unit roots.
A unit root test is statistical test for proposition that in autoregressive
statistical model of a time series, the autoregressive parameter is one. In
data series Y(t), where a whole number, modeled by :
Yt= aY(t-1) + et. (3)
Where (a) unknown constant, a unit root test would be a test as the
hypothesis a = 1, usually against the alternative that (a) is less than 1.
Testing for unit root in time series done by Dickey and Fuller 1979, Fuller
1976), Augmented Dickey Fuller (ADF), the Phillips – Person tests and
ADF-GLS procedure developed by Elliot, Rothenberg Stock (1996).

Methods to analyze a single integrated series had been proposed previously
by Box and Jenkins (1970) and others, but the joint analysis of pair, or more,
of such series were missing an important feature.
Before the 1980s many economists on (de-trended) non stationary time
series data which Clive Granger and Newbold (1974) showed to be a
dangerous approach, which could produce spurious correlation. His 1987
paper with Robert Engle formalized the co integrating vector approach, and
coined the term.
For his contribution to the techniques development Clive Granger,(2004)
Shared friends in the Scandinavian countries, including Johansen and
Kiterina Juselins in Copenhagen who developed and applied testing
procedures, Sevend Hylleberg in Arhus who extended the theory to seasonal
data.
3.2.5.1.2. Testing for Stationary:
The individual series will be examined using graphical evidence to
demonstrate the normality of the data density function and test for the
integrated properties of each series with Augmented Dickey Fuller (ADF)
tests develop by Dickey et al. (1986) for existence of unit roots. The essence
of the ADF tests is the null hypothesis of non-stationary, the rejection of
which requires a negative and significant test statistic. ADF test is based on
regression equation which may take the following forms.

Ρ
(i) With out trend and intercept (4) ∆Υt −1 = α 0 Υt −1 + ∑ α ∆Υt − j + ε t
j =1
Ρ
(ii) With intercept (5) ∆Υt −1 = δ + α 0 Υt −1 + ∑ α ∆Υ
j =1
t− j + εt
Ρ
(iii) With trend and intercept (6) ∆Υt −1 = δ + Βt + α 0 Υt −1 + ∑ α ∆Υt − j + ε t
j =1
Here ∆ is the first difference operator, is a white noise disturbance term with
variance, , and t = 1,… is an index of time. The terms on the right hand side
of equations (4), (5) and (6) allow for serial correlation and ensure that the
disturbance term is white noise.
Where δ is a constant, B the coefficient on a time trend and P the lag order
of the autoregressive process.
By including lags of the order P the ADF formulation allows for higher
order autoregressive processes. This means that the lag length P has to be
determined when applying the test. The unit root test is then carried out
under the null hypothesis (H0 : α0= 0) against the alternative hypothesis of
(H0 : α0< 0).
Use Dickey-Fuller (DF) Augmented Dickey–Fuller (ADF) test to estimates
the coefficient of Yt-1 in equation (6) is zero or not. If we find that the
computed absolute value of the t statistic is more than the DF critical values
we reject the null hypothesis that α0= 0 meaning no unit root is present,
(time series is stationary). On the other hand, If the computed value is less
than (an absolute value) the critical value, we don't reject the null
hypothesis, α0= 0 meaning the time series have a unit root (non-stationary
series).
3.2.5.2. Co-integration:
Co-integration is a concept for modeling equilibrium or long-run relations of
economic variables. It is an econometric property of time series variables.
If two or more series are themselves non stationary, but a linear combination
of them is stationary, then the series are said to be co integrated.
In performing a co-integration analysis, the first step to determine the order
of integration of the individual variables. This part of analysis will be
discussed in unit root test.
The usual procedure for testing hypothesis concerning the relationship
between non stationary variables was to run ordinary least squares (OLS)
regression after testing that Yt and pt both or 1(1)
Yt = QSt + et (1)
Engle and Granger were suggested the test to estimate Q by run ordinary
least squares (OLS) and the test for unit roots in
Ut = Yt – QSt (2)
Yt and St are said to be co-integrated if there exists a parameter Q.
We consider here two methods for testing co-integration:
Engle-Granger (EG) and Augmented Engle-Granger (AEG) test 1991, we
have warned that the regression of non-stationary time series on another

non-stationary time series may produce a spurious regression. After we
subjecting all time series prices in spatially separated markets (or different
levels of the supply chain) individually to unit root analysis, if
You will find that they are integrated of the same order say 1(1): that is they
have a unit root, then we regress ( ) on ( ) as follow:
Let as write this as
We now subject residual ( ) from co-integration regression to unit root
analysis
Since and are individually non-stationary there is possibility that this
regression is spurious. But when we perform a unit root test on the residuals
obtain form equation (4) by using The ADF unit root test and Phillip-Perron
(PP) test on the residuals from the co-integrating regression, if we find the
computed t value is much more than the critical t value, our conclusion
Is that the residuals from the regression of on conclusion are 1(0): that
is they are stationary. In this case the two variables are co-integrated, hence
equation (4) is a co-integrating regression and this regression is not spurious,
even though individually the two time series of prices are non-stationary.
One can call equation (4) the long run prices function and interpret its
parameters as long run parameters. Thus represent the long run or
equilibrium.
3.2.5.2.1. Johansen co-integration test:
“Johansen's (1988, 1991) method" is the maximum likelihood estimator of
the so-called Vector Error Correction Model (VECM) model to estimate co-
integrating vectors (β's) and of the adjustment parameters (α's).
The Johansen test is computed in the following way. Suppose we have n
variables that we think might be co-integrated. First, ensure that all the
variables are of the same order of non-stationary, and in fact are I(1), since it
is very unlikely that variables will be of a higher order of integration. Stack
the variables that are to be tested for co-integration into a n-dimensional
vector, called, say, yt. Then construct a n×1 vector of first differences, ∆yt,
and form and estimate the following VAR (k) model
∆y t = µ t + Πy t − k + Γ1 ∆y t −1 + Γ2 ∆y t − 2 + ....... + Γk −1 ∆yt −( k −1 ) + et (1)
which under the assumption of co-integration of order k can be written as
∆y t = µ t + αβ ' y t − k + Γ1 ∆y t −1 + ....... + Γk −1 ∆y t −( k −1 ) + et (2)
This equation can be written in summation form as:

k −1
∆y t = Πy t − k + ∑ Γ j ∆y t − j + et (3)
j =1
∆yt = yt – yt-1
ut is constant ,Γ1 and Π are (n x n) coefficient matrices, et is error term. ut
and et are (n x1) vectors, (t) is time t = 1, 2, , …., T, while k = 1, 2, , ….,t-1
Then test the rank of the matrixΠ. If Π is equal to zero this means that there
is no co-integration. If Π has full rank then all yt must be stationary since
the left hand side and the other right hand side variables are stationary (since
we limit ourselves to variables that are either I(0) or I(1)).
The most interesting case is when Π has less than full rank (has reduce rank
r< n) but is not equal to zero. This is the case of co-integration. In this case
Π can be written as Π = αβ΄ (β corresponds to the co-integration matrix n x
(n-1) matrix of co-integration vectors, (each column of β is a co-integrating
vector.)), where α and β are n x r matrices, r is the number of co-integrating
relationships. This lack of identification can sometimes render results from
multivariate co-integration analysis impossible to interpret and finding a
proper way of normalizing β, (and thereby α), α is n x( n-1)matrix of
coefficient or adjustment parameters. α can be interpreted as a “speed of
adjustment towards equilibrium".
Johansen (1988, 1991) proposes two different likelihood ratio tests of the
significance of these eigenvalue and thereby the reduced rank of the
matrix: the trace test and maximum eigenvalue test, shown in equations (4)
and (5) respectively.

n
λ trace = − T ∑ ln( 1 − λ i )
i= r +1
(4)
λmax = −T ln(1 − λr +1 ) (5)
Here is the sample size and λi is the characteristic roots (Eigen values).
The trace test tests the null hypothesis of co-integrating vectors against the
alternative hypothesis of co-integrating vectors. The maximum Eigen
value test, on the other hand, tests the null hypothesis of co-integrating
vectors against the alternative hypothesis of r +1 co-integrating vectors.
Co integration can be tested by testing the significance of the characteristic
roots or Eigen values. Co integration is said to exist if the Eigen value
statistics are significantly different from zero.

CHAPTER FOUR
Socioeconomic Characteristics
4.1. Age of the respondents:-
The majority of producers and traders in Gadarif, North Kordofan States and
their respective crop markets fell within the economically active age range.
The percentage of producers falling within the age range of 30-60 years old,
was about 86% of the total producers in Gadarif states compared to 64% of
the respondents in North Kordofan state.
Similarly, the traders falling within the age, accounted to about 96% of the
total respondents in Gadarif market, compared to 88% in El Obeid market,
and 80% in Om Rwaba market. Tables (4.1-4.5) show the frequency
distribution and a comparison of respondents' age between the two states and
the three markets.
Table (4.1): Age distribution of Gadarif State producers

Frequency Percent Valid Percent Cumulative Percent
Valid 20-30 2 1.0 1.0 1.0
31-40 32 16.0 16.0 17.0
41-50 88 44.0 44.0 61.0
51-60 53 26.5 26.5 87.5
61-70 21 10.5 10.5 98.0
>70 4 2.0 2.0 100.0
Total 200 100.0 100.0
Source; field survey 2008/09

Table (4.2): Age distribution of North Kordofan State producers:
Valid Cumulative
Frequency Percent Percent Percent
Valid 20-30 23 14.4 14.4 14.4
31-40 40 25.0 25.0 39.4
41-50 29 18.1 18.1 57.5
51-60 34 21.3 21.3 78.8
61-70 24 15.0 15.0 93.8
>70 10 6.3 6.3 100.0
Total 160 100.0 100.0
Table (4.3): Age distribution of Gadarif traders
Valid Cumulative
Valid 20-30 1 1.7 1.7 1.7
31-40 8 13.6 13.6 15.3
41-50 35 59.3 59.3 74.6
51-60 14 23.7 23.7 98.3
> 60 1 1.7 1.7 100.0
Total 59 100.0 100.0

Table (4.4): Age distribution of El Obeid traders:-
Valid Cumulative
Valid 31-40 5 11.6 11.6 11.6
41-50 26 60.5 60.5 72.1
51-60 7 16.3 16.3 88.4
> 60 5 11.6 11.6 100.0
Total 43 100.0 100.0
Table (4.5): Age distribution of Om Rawaba traders:
Valid Cumulative
Valid 20-30 6 20.0 20.0 20.0
31-40 8 26.7 26.7 46.7
41-50 9 30.0 30.0 76.7
51-60 7 23.3 23.3 100.0
Total 30 100.0 100.0

4.2. Education:-
Tables (4.6 – 4.10) showed the education level frequency and comparison
between two states and the three markets: the education levels analysis
prevalence of illiteracy among crop producers of North Kordofan about
39.4% compared to that of Gadarif state,(about 0.5%). Incase of preliminary
education, North Kordofan producers concentrated around Khalwa and
primary school, about 46% compared to Gadarif producers, who
concentrated around secondary, university, and post university, having about
60.5%.
Producers seem to have received better education level in Gadarif state
compared to those found in North Kordofan state. The Gadarif producers
are commercial farmers while those of North Kordofan are mostly rain fed
traditional farmers who had not received good education. However the gap
between producers' education level in Gadarif and North Kordofan seemed
to have reduced in case of traders in the two states. The education level of
traders in Gadarif market, were mostly secondary and university graduates
(91.6%). Which the education level of the traders in either of El Obeid or
Om Rwaba markets were about 86% and 83.4% of total respondents
respectively. Not far below those of Gadarif state traders. It seemed trading
is encouraged by relatively high level of education than crop farming
profession.
Table (4.6): Education distribution level of Gadarif producers:
Cumulative
Frequency Percent Valid Percent Percent
Valid Illiterate 1 0.5 0.5 0.5
Khalwa 44 22.0 22.0 22.5
Primary 22 11.0 11.0 33.5
Secondary 24 12.0 12.0 45.5
University 55 27.5 27.5 73.0
Post graduate 42 21.0 21.0 94.0
7 12 6.0 6.0 100.0
Total 200 100.0 100.0
Table (4.7): Education distribution level of North Kordofan state

producers:
Valid Cumulative
Khalwa 26 16.3 16.3 55.6
Primary 48 30.0 30.0 85.6
Secondary 11 6.9 6.9 92.5
University 10 6.3 6.3 98.8
post graduate 2 1.3 1.3 100.0
Total 160 100.0 100.0

Table (4.8): Education distribution of Gadarif traders:
Valid Cumulative
Valid Secondary 5 8.5 8.5 8.5
University 27 45.8 45.8 54.2
post graduate 27 45.8 45.8 100.0
Total 59 100.0 100.0
Table (4.9): Education distribution of EL Obeid traders:-
Valid Cumulative
Valid Khalwa 2 4.7 4.7 4.7
Primary 2 4.7 4.7 9.3
Secondary 9 20.9 20.9 30.2
University 17 39.5 39.5 69.8
post graduate 11 25.6 25.6 95.3
7.00 2 4.7 4.7 100.0
Total 43 100.0 100.0

Table (4.10): Education distribution of Om Rawaba traders:
Valid Cumulative
Primary 4 13.3 13.3 16.7
Secondary 6 20.0 20.0 36.7
University 14 46.7 46.7 83.3
post graduate 5 16.7 16.7 100.0
Total 30 100.0 100.0
3.3. Occupation:-
The majority of the respondents' producers in Gadarif (79.5%) were farmers,
and about (19.5%) had other job such as traders (0.5%), official in the civil
service (18%).
In the case of the respondents in El Obeid, almost all of the producers
(96.3%) practiced farming as their main occupation. Regarding the
respondents in Gadarif crops market, about (72%) were traders, and an
equivalent proportion (13.6%) each were either farmer or official in the civil
service. In El Obeid market, more respondents were traders (90.7%), and
less was farmers (9.3%). Om Rwaba relatively investigated respondents
results indicated (80%) as traders, and (16%) as farmers with no civil service
officials. It may be concluded that farmers in North Kordofan largely had

one type of occupation, which traders in the two states may assume farming
as an additional of occupation. (Tables 4.11 – 4.15).
Table (4.11): Occupation distribution of Gadarif State producers

Valid Cumulative
Valid Trader 1 0.5 0.5 0.5
Farmer 159 79.5 79.5 80.0
Professionals 35 17.5 17.5 97.5
Technicians 4 2.0 2.0 99.5
House wife 1 0.5 0.5 100.0
Total 200 100.0 100.0
Table (4.12): Occupation distribution for North Kordofan State

producers
Valid Cumulative
Valid Trader 1 0.6 0.6 0.6
Farmer 154 96.3 96.3 96.9
Labour 1 0.6 0.6 98.1
House wife 3 1.9 1.9 100.0
Total 160 100.0 100.0

Table (4.13): Occupation distribution of Gadarif traders
Valid Cumulative
Valid Trader 43 72.9 72.9 72.9
Farmer 8 13.6 13.6 86.4
Total 59 100.0 100.0
Table (4.14): Occupation distribution of El Obeid traders

Valid Cumulative
Valid Trader 39 90.7 90.7 90.7
Farmer 4 9.3 9.3 100.0
Total 43 100.0 100.0
Table (4.15): Occupation distribution of Om Rwaba traders:
Valid Cumulative
Valid Trader 24 80.0 80.0 80.0
Farmer 5 16.7 16.7 96.7
Total 30 100.0 100.0

3.4. Martial status:-
Tables (3.16 – 3.20) showed the distribution percentage of martial status and
a comparison between the two states and the three markets. The majority of
the respondents interviewed in the three markets were socially stable people,
they were married and only few producers and traders were single.
Table (4.16): marital status distribution of Gadarif State producers:
Valid Cumulative
Valid Married 187 93.5 93.5 93.5
Single 11 5.5 5.5 99.0
Divorced 1 0.5 0.5 99.5
Widow 1 0.5 0.5 100.0
Total 200 100.0 100.0

Table (4.17): marital status distribution of North Kordofan State
producers:
Valid Cumulative
Valid Married 140 87.5 87.5 87.5
Single 14 8.8 8.8 96.3
Divorced 4 2.5 2.5 98.8
Widow 2 1.3 1.3 100.0
Total 160 100.0 100.0
Table (4.18): Martial status distribution of Gadarif traders
Valid Cumulative
Valid Married 59 100.0 100.0 100.0
Table (4.19): Martial status distribution of El Obeid traders
Valid Cumulative
Valid Married 42 97.7 97.7 97.7
Single 1 2.3 2.3 100.0
Total 43 100.0 100.0

Table (4.20): Martial status distribution of Om Rawaba traders
Valid Cumulative
Valid Married 23 76.7 76.7 76.7
Single 7 23.3 23.3 100.0
Total 30 100.0 100.0
4.5. Experience of production and trade:-
Tables (4.21 – 4.25) showed that the majority of the respondents interviewed
in the two states and three markets that produced and traded in sesame for
more than fifteen years. About 78.5, 60, 49.2%, 48.8% and 20% of
respondents of Gadarif El Obied and Om Rwaba respectively had high
experience in producing and trading sesame.
Table (4.21): Period distribution of sesame cultivation of Gadarif State

producers
Valid Cumulative
Valid < 5 6 3.0 3.0 3.0
5-10 21 10.5 10.5 13.5
10-15 16 8.0 8.0 21.5
> 15 157 78.5 78.5 100.0
Total 200 100.0 100.0

Table (4.22): Period distribution of sesame cultivation of North
Kordofan State producers
Valid Cumulative
Valid < 5 17 10.6 10.6 10.6
5-10 29 18.1 18.1 28.8
10-15 18 11.3 11.3 40.0
> 15 96 60.0 60.0 100.0
Total 160 100.0 100.0
Table (4.23): Experience distribution in trade by Gadarif traders
Valid Cumulative
Valid < 5 6 10.2 10.2 10.2
5-10 7 11.9 11.9 22.0
10-15 16 27.1 27.1 49.2
> 15 29 49.2 49.2 98.3
5.00 1 1.7 1.7 100.0
Total 59 100.0 100.0

Table (4.24): Experience distribution in trade by El Obied traders:-
Valid Cumulative
Valid < 5 6 14.0 14.0 14.0
5-10 9 20.9 20.9 34.9
10-15 7 16.3 16.3 51.2
> 15 21 48.8 48.8 100.0
Total 43 100.0 100.0
Table (4.25): Experience distribution in trade by Om Rwaba traders
Valid Cumulative
Valid < 5 8 26.7 26.7 26.7
5-10 5 16.7 16.7 43.3
10-15 10 33.3 33.3 76.7
> 15 6 20.0 20.0 96.7
5.00 1 3.3 3.3 100.0
Total 30 100.0 100.0

4.6. Type of traders:
Tables (4.26- 4.28) showed four type of traders, Gadarif market had the most
purchasers (30.3%), followed by El Obeid (25.6%), and Om Rwaba market
(16.7%). El Obeid had large numbers of purchasers representatives
(Wakeels) about (51.2%), and Gadarif had (27.1%), but more than that was
found among Om Rwaba traders as assemblers (about 60%).
Table (4.26): Distribution of type of trade of Gadarif traders
Valid Cumulative
Valid Seller 7 11.9 11.9 11.9
Purchaser 18 30.5 30.5 42.4
Seller W 2 3.4 3.4 45.8
Purchaser
16 27.1 27.1 72.9
W
1,2 16 27.1 27.1 100.0
Total 59 100.0 100.0

Table (4.27): Distribution of type of trade of El Obeid traders
Valid Cumulative
Valid Seller 3 7.0 7.0 7.0
Purchaser 11 25.6 25.6 32.6
Purchaser
22 51.2 51.2 83.7
W
1,2 7 16.3 16.3 100.0
Total 43 100.0 100.0
Table (4.28): Distribution of type of trade of Om Rwaba traders
Valid Cumulative
Valid Seller 5 16.7 16.7 16.7
Purchaser 5 16.7 16.7 33.3
seller W 2 6.7 6.7 40.0
1,2 18 60.0 60.0 100.0
Total 30 100.0 100.0

4.7. Source of finance:-
The Source of finance is either self or borrowing from the bank. The self
financing is provided through personal saving or selling of crops and
animals for the purpose of financing sesame production and trade activities
(Tables 4.29-4.33).
Self financing is high among farmers in both Gadarif state (44.8%) and
North Kordofan state (46.8%). The role of the bank is more clearing in the
case of Gadarif farmers reported by (25%) of the respondents. It was
minimal in case of North Kordofan state (5.1%). However, other source of
finance such as selling crops and animals played an important role (25.9%)
for Gadarif and (48.1%) for North Kordofan states. The same phenomena
also applied to the role and source of financing of sesame traders in the three
markets. Self financing was reported by (62%) of traders in Gadarif market,
(83.3%), by El Obeid traders and (100%) by Om Rwaba traders. When
considering selling of crops and animals as supplementary source of self
financing, the role of the respondents increases substantially up to 100% in
case of Om Rwaba traders.

Table (4.29): Distribution of finance by type for Gadarif State
producers
Frequency Percent Valid Percent Cumulative Percent
Self finance 87 43.5 44.8 44.8
selling crops 5 2.5 2.6 47.4
selling animals 7 3.5 3.6 51.0
Bank 49 24.5 25.3 76.3
Others 6 3.0 3.1 79.4
1,2 9 4.5 4.6 84.0
1,3 15 7.5 7.7 91.8
1,4 6 3.0 3.1 94.8
1,5 3 1.5 1.5 96.4
2,3 4 2.0 2.1 98.5
3,4 1 .5 .5 99.0
3,5 2 1.0 1.0 100.0
Total 194 97.0 100.0
Missing System 6 3.0
Total 200 100.0

Table (4.30): Distribution of finance by type for North Kordofan State
producers
Valid Cumulative
Self finance 74 46.3 46.8 46.8
selling crops 19 11.9 12.0 58.9
selling animals 9 5.6 5.7 64.6
Bank 8 5.0 5.1 69.6
Others 10 6.3 6.3 75.9
1,2 2 1.3 1.3 77.2
1,3 8 5.0 5.1 82.3
1,5 3 1.9 1.9 84.2
2,3 9 5.6 5.7 89.9
2,5 1 .6 .6 90.5
1,2,3 7 4.4 4.4 94.9
3,4 2 1.3 1.3 96.2
3,5 4 2.5 2.5 98.7
2,3,5 1 .6 .6 99.4
1,3,5 1 .6 .6 100.0
Total 158 98.8 100.0
Total 160 100.0

Table (4.31): Distribution of finance by type for Gadarif traders
Valid Cumulative
Valid .00 5 8.5 8.6 8.6
Self 34 57.6 58.6 67.2
Bank 15 25.4 25.9 93.1
sell other crop 1 1.7 1.7 94.8
sell animals 1 1.7 1.7 96.6
1,2 2 3.4 3.4 100.0
Total 58 98.3 100.0
Total 59 100.0
Table (4.32): Distribution of finance by type for El Obied traders:-
Valid Cumulative
Self 33 76.7 78.6 78.6
Bank 7 16.3 16.7 95.2
sell other crop 2 4.7 4.8 100.0
Total 42 97.7 100.0
Total 43 100.0

Table (4.33): Distribution of finance by type for Om Rwaba traders
Valid Cumulative
Self 20 66.7 83.3 83.3
sell other crop 4 13.3 16.7 100.0
Total 24 80.0 100.0
Missing No answer 6 20.0
Total 30 100.0
4.8. Direct purchase from producer:-
Most of the traders in the auction markets are not producer. The answers of
the traders varied about whether they purchase directly from producers or
not. About 46%, of the traders purchased directly from producers for
Gadarif, and (70.8%) of traders buy sesame directly from producers for Om
Rawaba to (31.4%) in case of El Obeid market. However in case of Om
Rawaba traders, 60.9% of the respondents indicated may buy directly from
producers these differences may reflects to the distance between producers
and buyers, in Gadarif and El Obeid the producers farther from the buyers
than producers in Om Rwaba who has relatively less distance (tables 4.34 –
4.36).
The others, about 54% had not or sometimes purchased sesame directly from
producers in Gadarif market, (68.6%) in El Obeid market, and (29.1%) in
Om Rwaba market.
Table (4.34): Direct purchases from Producers in Gadarif State
Cumulative
Yes 23 39.0 46.0 46.0
No 16 27.1 32.0 78.0
Sometime 11 18.6 22.0 100.0
Missing System 9 15.3 100.0
Total 59 100.0 100.0
Table (4.35): Direct purchases from producer in El Obied
Cumulative
Yes 11 25.6 31.4 31.4
No 17 39.5 48.6 80.0
Sometime 7 16.3 20.0 100.0
Total 35 81.4 100.0
Total 43 100.0

Table (4.36): Direct purchases from Producer in Om Rwaba
Frequenc Valid Cumulative
y Percent Percent Percent
Yes 17 56.6 70.8 70.8
No 5 16.7 20.8 91.7
Sometime 2 6.7 8.3 100.0
Total 24 80.0 100.0
Total 30 100.0
4.9. The reason behind traders who were not purchasing from
producers directly:-
From those who had not purchased sesame or had sometimes purchased
sesame directly from producers in Gadarif market were due to remoteness
(63%) and few quantities supplied (37%). Similarly, in El Obeid market,
about 75% had not purchased because of distant production areas and 25%
because of small quantities supplied. For Om Rwaba market, about57% had
not due to remoteness and 43% due to smallness of quantities respectively
(tables 4.37-4.39). Traders have to send their representatives to move around
farms and villages for accumulating crops, which incurs a high cost of
collection.
Table (4.37): Reasons for traders who were not purchasing from
producers directly in Gadarif
Valid Cumulative
Remoteness of the
17 28.8 63.0 63.0
producer
Few quantity
presented by the 10 16.9 37.0 100.0
producers
Total 27 45.8 100.0
Total 59 100.0
producers directly in El Obied
Valid Cumulative
remoteness of the
18 41.9 75.0 75.0
producer
Few quantity
presented by the 6 14.0 25.0 100.0
producers
Total 24 55.8 100.0
Total 43 100.0
producers directly in Om Rwaba
Valid Cumulative
Remoteness of the
4 13.3 57.1 57.1
producer
Few quantity
presented by the 3 10.0 42.9 100
producers
Total 7 23.3 100
Total 30 100.0
CHAPTER FIVE
Results and Discussion of Marketing Channel, Cost and Structure, and

International Geographical Destinations Analyses
5.0. Introduction
This chapter gives definitions, description of the market channel and
marketing cost of sesame crop in the Gadarif and North Kordofan states and
market structure. It also presented an analysis of the geographical
distribution of Sudan exports of sesame crop in the world.
5.1. Definitions of a market and marketing terms:
According to Business Dictionary.com (Copyright@2010.webfinance.Inc.)
the following definitions are given:
a) Market:
A market may be defined to include only a single good or a group of goods
according to the following criteria: (1) a single good has a "low" cross
elasticity with respect to all other goods and thus constitutes a market by
itself, or (2) some group of goods have "high" cross elasticity among
themselves, but "low" cross elasticity with respect to all other goods and
thus collectively define a market (Smits, 1958)
b) Management process: by this term it is meant that goods and services
are moved from origin of production to final consumers benefit and
satisfaction. It is composed of four subcomponents termed as the 4 Ps as
follows:
1) Identification, selection and development of a product,
2) Determination of the price of the product,
3) Selection of the distribution channel when delivered from the original
production site to the end user, at the final consumer place,
4) Development and implementation of a promotional strategy.
Of all these subcomponents, this study attempted to involve the first three
while the fourth was not discussed by this thesis.
c) Market efficiency
It is a measure of the availability of the information (to all participants in a
market) that will give maximum alternative opportunities to buyers and
sellers to effect transactions by minimum transaction costs.
d) Market equilibrium
Novshek, W., and H. S. (1987) defined Market equilibrium as, The position
where the supply of good in the market is exactly equal to its demand, the
supply does not exceed or gets less than the demand. In this case there will
be no chance for the price of the good to change (the price is stable).
e) Market orientation
The type of products in which markets encourage and promote to supply in
response to the felt demands of the consumers.
f) Market p product
The term market product refers to a good, a form of information, an object
or a service that evolves as an end result of a process yielding satisfaction

that satisfies offers benefits from sellers to consumers. It implies transfer of
owner ship of a tangible or a non-tangible product obtained through
manufacturing or processing and distributed through known channels. The
products if composed of a number of goods and services could lead to the
establishment of marketing mixed institutions that meet the inherent
demands of consumers with yielded profit.
g) Receiving
The place where goods are exchange from sellers to buyers, it may involve
the administrative function that checking of the quality, quantity, and
condition of the receiving goods to their storage.
h) Customer
The person or buyer who receives or consumes good or services and has the
ability to choose between different products, it also extends into the quality
control aspect, which is a person within a firm who establishes the
requirements of process and receipt of the output of that process from one or
more internal or external suppliers.
5.2. Marketing objectives:
There are several objectives to achieve marketing aims, including:
1 - Collection of goods, whether raw materials or food materials, made at a
central point of certain easy transport.
2 - Distribution of products in the market and to the consumer,

3 – Help to balance supply and demand taking into account the time and
quantity.
To understand any marketing system, aspects it should be divided into a
number of functions, or processes, or services to facilitate the study and
analysis of the marketing problems.
5.3. Marketing Function:
Can be divided into services and marketing operations into four main
sections:
1 - Physical handling Function: include assembling, grading and division,
packaging, storage and transport.
2 - Facilitating function: include funding, risk-taking and preparation of
marketing information.
3 - Processing function: include the conversion of crops or raw agricultural
products into food intended for direct consumption?
4 - Exchange function: include purchases and sales.
5.3.1. Physical Handling Function:
a) Assembling:
It is the first stage of the marketing operations, where it is a collection of
similar products in certain centers and close to the place of production for
the purpose of grading, transporting and decreasing the costs. One advantage
of the assembly is to increase the bargaining power through collective
bargaining.
b) Grading:
A process by which agricultural crops in are classified according to the
standards and features recognized in terms of shape, size, degree of maturity,
chemical contents and humidity. to improve their the grade or degree. The
grading of each crop depends on the nature of the crop.
The most important benefits to be derived from the grading process are:
1 - costs by the removal of damaged units (transportation costs).
2 - To facilitation of a comparison process, marketing, and saving time for
buyers and sellers,.
3 - Paying producers to improve their products for high-quality varieties.
4 – Reduction of financing costs, for accessing of credit at a certain degree
along the different stages of marketing.
5 – Reduction of risk in terms of class or grade, aiming at reducing fraud and
price manipulation.
c) Sorting, dividing and packing:
Sorting is a process which isolates products into different brands in terms of
size, large, medium and small.
d) Packaging:
Is containing agricultural crops within vessels to maintain them and when
transferred.
These processes help to increase marketing efficiency follows:

1 - Help to reduce the size of the crop and reduce the costs borne as in bales
of cotton,
2 - To facilitate storage, transportation and sale,
3 - Reduce the amount of damage suffered by a process of crop packaging,
e) Storing
This is the process by which to save the crops in a good condition for sale to
the consumer. This process maintains and preserve crop against weather
damage for transportation to markets. Also storage helps to balance supply
and demand. The storage of crops or product takes place in stores,
refrigerators, and frozen places.
f) Transportation: is the process of moving products to markets
5.3.2. Facilitating function:
a) Funding: -
Is the process of creating money and credit needed to move the crops in
various stages of marketing? The borrowed money requires interest payment
of.
b) Risk Bearing:
The product on moving through marketing operations experiences a lot of
damage and risks.
c) Marketing information:
Supply Information about current and future prices,

Marketing information includes:
1 - Information on the quantity and location of product,
2 - Information relates to the purchase price of crops in various stages of
marketing and consumption,
3 - Information on changes in natural?
4 - Information on prices level, and movement,
5.3.3. Processing function: It is the processes by which products convert
raw agricultural materials into new and more appropriate form for use,
5.3.4. Exchange function: Buying and selling activities for transfer of
ownership of products from producers to consumer,
5.4. The marketing channel:
Marketing channel is a distribution chain of products from producers to
consumers when and where they need them. Figure (4-1) gives a chart of the
different partners involved in marketing and export of sesame crop in the
two states.
5.4.1. Producer:-
Normally producers sell most of their production either to assemblers,
traders, exporters or sometimes in auction market. The majority of the
producers who supply sesame to the auction markets are not the real
producers because the production areas are far from the markets. The
Assemblers collect and move sesame products from production area to
markets and different buyers.

5.4.2. Assemblers:-
They represent the link between the real producers and the auction market.
They collect the sesame from the producers at their area of production
(farms), villages and market villages at relatively low prices, Producers have
no market information about prices in domestic auction market and world
market. They use their own capital to bring sesame to the auction markets.
5.4.3. Representatives (Wakeels):-
There were two types of Wakeels, a Wakeel for sellers and wakeel for
buyers. Sometimes the big traders or exporters do not visit the production
areas but send their Wakeels to buy sesame on their behalf. The Wakeels do
not use their own capital but use information about the prices levels and
quality of the crop. They usually get a commission per kantar on bought
sesame.
5.4.4. Auction market:
El Obeid and Gadarif and Om Rwaba crop markets have been established in
1912, 1930 and 1938 respectively (Abdel Rahman, personal interview, Crop
markets Administration of Gadarif (2010), El obeid (2009) and om Rwaba,
(2009). The first two markets started the system of auction markets in 1930
while the third developed through time. These auction markets facilitate crop
transactions activities on market transparency principles. They also keep
data banks on sales and prices. The auction marketing system required
registration of traders in advance of the marketing season and offers banking

and storage facilities for both buyers and sellers. It is the centre of
commodity collection and distribution for sesame and other main crops in
Sudan. These auction markets provide a link between producers, traders,
exporters, oil and confectionary manufacturing enterprises, retailers and
consumers.
Producers and sellers are given numbers for heir crop lots in the market .
Auction officials who mange the market, start the bidding by calling the
number of the lot. If the price is not conducive the producer or seller can
refuse to sell. Unsold lots of sesame, because of refusal of the seller can be
left to the coming bidding. The seller can auction for the third time the
following day. This time he is committed to sell at any price because if he
does not sell at the last chance, he must transport his product out side the
auction market at cost.

Sesame producer
Consumer Assembler Wakeel
Outside Auction
Auction Market
Processing Factories Wholesaler Exporter

Confectionary, Cake
Retailer
Feedlot
Owners Consumer
Figure 5.1: Marketing channel of sesame in Sudan

5.5. Marketing margins and costs:
Estimation of the marketing margins and costs gives an overview of the cost
of marketing services between producers and final consumers along the
marketing chain. The chain incorporates several players, the producers, and
assemblers, traders (exporters, oil traders, factories traders, retailers and
consumers). Table (5.1) gives the respective marketing costs for each stage
along the market channel chain. The 2008/2009 survey covered sesame
exported from Port Sudan and originating from three areas: Gadarif, El
Obied and Om Rwaba (tables 1 to 4 appendices). The assemblers were
independent operators in Gadarif, El Obied and Om Rwaba markets.
Compared to Gadarif market, the assembler marketing cost for sesame
was high in El Obied SDG 134.85 per ton and Om Rwaba SDG 134.14
per ton due to the high local fees in those markets. North Kordofan State
applied 5% local fees on the sale price in main and locality markets,
(which equivalent SDG 3 on kantar) while in Gadarif State these fees were
abolished in the locality markets but imposed at SDG 0.50 on Kantar in
the main crop markets of the State(which including in the marketing fees).
The exporter marketing cost was almost equivalent for each of the three
markets, about SDG 407.8 per ton on average. Port Sudan expenses
constituted the highest marketing costs for sesame originating from Om
Rwaba, and El Obied markets, representing 47.29% and 43.49% of the
total marketing costs due to the high level of physical losses incurred.
These costs were relatively lower for sesame originating from Gadarif
markets, simply because Gadarif exporters sieve and pack their
commodity on situ while exporters buying from El Obied and Om Rwaba
carry these activities in Port Sudan. In both cases the sieving and packing
costs and costs incurred due to crop losses were almost equivalent to both
Gadarif and North Kordofan exporters. Transportation was the second
highest cost representing 16.69% to 22.75% for the three markets
respectively.
Table (5.1): Marketing costs of sesame
in Gadarif, El Obeid and Om Rwaba markets (SDG/Ton)
Gadarif Gadarif Average
Items with without El Obeid Om Rwaba
finance finance
Total marketing cost 488.83 500.01 569.07 510.09 533
Exporter marketing 407.8

409.47 411.57 434.22 375.95
cost
Assembler marketing 125.2
79.36 88.44 134.85 134.14
cost
Port Sudan expenses* 54.38 54.62 247.51 241.22 149.43
Share of Port Sudan 27%

expenses from total 11.12% 10.92% 43.49% 47.29%
marketing cost
Share of Port Sudan 37%
expenses from
13.3% 13.3% 57% 64.2%
exporter marketing
costs
Total transportation 103.7
100.98 99.03 129.47 85.12
cost
Share of total 19.4%
transportation cost
20.66% 19.81% 22.75% 16.69%
from total marketing
cost
Physical losses 134.28 127.8 117.68 108.58 122.1
Share of physical 30%

losses from exporter 32.79% 31.03% 27.10% 28.88%
marketing costs
Share of losses from 4.27%
4.55% 4.21% 4.16% 4.14%
FOB price
* Export expenses of sesame differ between Gadarif and North Kordofan due to incurred
cost in crop losses, sieving, sack and marks carried out in Gadarif, while those of North
Kordofan are carried out in Port Sudan.
Source: Annex Tables 5.1, 5.2, 5.3, 5.4
The producer received the largest share of the FOB price, about 75.35% on
average for Gadarif farmers and about 71.71% for El Obeid and 76.65% for
Om Rwaba farmers (table 5.2). The assemblers received about 82.7% of
FOB price for Gadarif and 80% for El Obeid and 85.3% for Om Rwaba
markets traders. The price margin between the farmer and the assemblers
was 7.3% for Gadarif traders and 8.7% for each of El Obeid and Om Rwaba
traders. The exporters received from the FOB price, about 17.3% more than
that of the assemblers at Gadarif and about 19.6% more than that of El
Obeid assemblers and about 14.7% more than that of Om Rwaba assemblers.
Table (5.2): prices and farmers,
Assemblers and exporters share of sesame in Gadarif and El Obeid and
Om Rwaba markets from FOB price for the season 2008/09
Gadarif
Gadarif Om
Items without El Obeid
with finance Rwaba
finance
FOB Price
1262.5 1296.79 1208.2 1122
(US$/ton)
Farmer price (%) 75.35 77.96 71.71 76.65
Assembler
marketing 7.31 5.98 8.67 8.61
margin (%)
Assembler price
82.7 84.1 80.4 85.3
(%)
Exporter marketing
17.34 15.90 19.62 14.71
margin (%)
Exporter price
100 100 100 100
(%)
Assembler net
4.58 3.06 3.91 3.54
margin (%)
Exporter net
3.48 2.34 4.26 0.39
margin (%)
Source: Annex Tables 5.1, 5.2, 5.3 and 5.4

5.6. Sesame market structure results and discussion:
5.6.1. Sesame sellers’ concentration in Gadarif:
Table (5.3) ranks market concentration ratio of traders selling sesame in
Gadarif Auction market in 2008/09. It was found that the first largest 4
traders sold about 39% of total sesame sales followed by next 4 traders who
had additional 10.8% of the sales. The top 8 and 10 sold about 50% and 51%
respectively of the total sales. According to HHI “a good rule of thumb is to
only look at the top 10 competitors, or however many it takes to capture
50% market share” reflecting an oligopoly situation in Gadarif sesame
market during the study season.

Table (5.3): Sesame sellers’ concentration ratio in Gadarif
Quantity % Share % cumulative
sold(Kantar) share
1 126627 11.6
11.6
2 120000 11
22.6
3 114400 10.4
33
4 66000 6
39
5 46000 4.2
43.2
6 29000 2.7
45.9
7 22600 2.1
48
8 20000 1.86
49.86
9 7000 0.64
50.5
10 6500 0.59
51.09
Total 1096005 51.09
Source: Field Survey (2009).
5.6.2. Sesame sellers’ concentration in El Obied:
Table (5.4) gives the market concentration in El Obeid sesame market. It
was found that the first largest 4 traders had sold 37.9% of the total sales of
sesame followed by the next 4 having sold an extra of 14.3% of the total
sales. The top 8 traders sold 52.2%, and top 10 sold 53.6% which indicate
existence of oligopoly in the market.

Table (5.4): Sesame sellers’ concentration in El Obeid Market
El Obied sellers Quantity sold %share % cumulative share
1 6300 15.5 15.5
2 3800 9.4 24.9
3 2750 6.8 31.7
4 2500 6.2 37.9
5 2200 5.4 43.3
6 2000 4.9 48.2
7 1000 2.5 50.7
8 600 1.5 52.2
9 300 0.74 52.94
10 280 0.69 53.63
Total 40651 53.63
5.6.3. Sesame buyers’ concentration in Gadarif:
Table (5.5) ranks market concentration ratio of traders buying sesame in
Gadarif Auction market in 2008/09. It was found that the largest 4 traders
bought about 75.7% of total sesame purchase where the top 8 bought about
86% of the total sales. According to HHI the sesame sellers market in
Gadarif revealed moderately concentrated market structure. The two
measures reflected existence of an oligopsony situation in Gadarif sesame
market during the study season.

Table (5.5): Sesame buyers’ concentration in Gadarif
Rank of buyers Quantity bought % Share Top 10 traders
market share squared
1 278361 25.4 645.0
2 247887 22.6 511.5
3 207218 18.9 357.5
4 96542 8.8 77.6
5 44520 4.1 16.5
6 30073 2.7 7.5
7 22260 2.0 4.5
8 15582 1.4 2.0
9 5119.8 0.5 0.2
10 2226 0.2 0.04
Total 1096005 86.6 1622.3

5.6.4. Sesame buyers’ concentration in El Obeid:
Table (5.6) ranks market concentration ration of traders buying sesame in El
Obeid Auction market in 2008/09. It was found that the first largest 4 traders
sold about 34.6.7% of total sesame purchase followed by the top 8 bought
about 75% of the total sales reflecting an oligopsony situation in El Obeid
sesame market during the study season. However, according to HHI the
sesame buyers market in El Obeid revealed a moderately concentrated
market structure. The two tools reflected existence of an oligopsony
situation in El Obeid sesame market during the study season.

Table (5.6): Sesame buyers’ concentration in El Obeid
Quantity bought % Share Top 10 traders market Share squared
1 6678 16.4 270
2 5565 13.7 187
3 4968 12.3 155
4 3495 8.6 74
5 3116 7.7 59
6 2671 6.6 43
7 2115 5.2 27
8 1781 4.4 19
9 1224 3.0 9
10 1002 2.5 6
Total 40651 80.4 849
5.6.5. Market structure of sesame exporters:-
Table (5.7) gives the concentration ratio of sesame exporters in 2009. The
exporters’ structure followed the oligopoly model as few exporters
dominated and controlled the exports. The top 4 sesame exporters had
exported about 32% of total exported and the top 8 export 53%. According
to HHI the top 10 sesame exporters sold 57.1% of total exports of Sudan
revealing oligopoly market structure. Oligopoly prevailed as sesame sales
and purchases required large capital.

Table (5.7): Exporters concentration in Sudan 2009
1 Quantity exported/Ton % Share
1 12505 9.1
2 11136 8.1
3 9309 8.0
4 9082 6.8
5 5660 6.8
6 4847 6.6
7 4337 4.1
8 3878 3.5
9 3590 2.6
10 2000 1.5
Total 137659 57.1
5.7. Conclusions for market structure, conduct and performance:

Regarding the market structure analyses the results revealed that the
concentration of buyers of sesame crop seemed to be high due to constraints
against free entry caused by need for capital and trade permit license.
However in the case of the sellers structure despite the existence of some
sort of concentration, yet the number of sellers was exceedingly large to be
recorded, and therefore the top 10 share of the sampled respondents were
estimated to arrive at the HHI indicator.

Regarding the market conduct analysis, the results indicate that there is a
high possibility of collusion with regard to price determination. The sellers,
on the other hand, the results indicate that there is moderate oligopoly and
therefore their influence on price setting is not as high as in case of the
buyers.
As for market performance the effect on the society will be reflected in
higher prices for consumers and low prices for producers. Hence, the traders
seem to be the main beneficiaries. Therefore, it may be concluded that the
performance of the sesame market is inefficient due to presence of
oligopsony and oligopoly.
5.8. Geographical destinations of sesame exports:

Sesame exports of Sudan find its markets in variety of countries in the
world. The export of sesame crop went into Asia, Europe, Africa, and
American Countries. Table (5.8) shows the different countries blocks by
average exports of sesame of Sudan during the period (2000-2009). From
the table it was evident that Arab- Asian countries ranked first among the
different countries blocks in receiving sesame exports of Sudan. These
countries received an average of US$ 45.9 million of sesame export value,
accounting to 37% of total Sudan exports of the crop during (2000-2009).
Non Arab- Asian countries ranked second among the different countries
blocks in receiving sesame exports of Sudan. These countries received an
average of US$ 32.8 million of sesame export value, accounting to 26.4% of

total Sudan exports of the crop during (2000-2009), but African- Arab
countries rank third, it received about 22.9% of total Sudan sesame exports.
Then Western European countries, Non African Arab countries , Eastern
European countries, Southern American countries, others countries,
Northern American countries, Scandinavian countries and Igyanosya
countries, were received less than 10% each of total Sudan sesame exports.
Table (5.8): Relative share of Sudan sesame exports according to groups

of import countries during the period during 2000-2009
Economical Sections Average period 2009-2000 Relative share
value (US$ 000) %
Arab- Asian countries 45914.4 37.0
Non Arab- Asian countries 32783.0 26.4
African Arab countries 28480.2 22.9
Western European countries 11469.3 9.2
Non African Arab countries 3255.2 2.6
Eastern European countries 1025.8 0.8
Southern American countries 500.7 0.4
Others 481.6 0.4
Northern American countries 212.2 0.2
Scandinavian countries 135.9 0.1
Igyanosya 1.5 0.01
Total 124259.8 100.0
Source: table 5-5 annex
Table 5.9 gives the average imports value of the various countries during
2000-2009, while figure (5.2) gives the trend of selected countries imports
for the same period. Country wise, Egypt was the best costumer of Sudan
sesame, importing a worth value of US$ 20.64 million, accounting to 16.6%
of total exports of sesame of Sudan during (2000-2009). Saudi Arabia was
the second costumer of Sudan sesame, importing US$16.72 million,
accounting 13.5% of total exports of sesame of Sudan. China was third as it
received about 11.1% of total exports value of sesame of Sudan. Lebanon,
Syria, Southern Korea, and other countries, imported less than 10% each of
total exports value of sesame of Sudan followed by Tunisia, Japan,
Netherlands, Greece, Jordan, Turkish, and United Arabia Emirate which
imported less than 5%.

Table (5.9): Average exports value of sesame from Sudan by different
countries during the period (2000-2009)
Country average value Relative share (%)
(US$ 000)
Egypt 20638.6 16.61
Saudi Arabia 16718.8 13.46
China 13828.5 11.13
Lebanon 10580.0 8.52
Syria 10567.0 8.50
Southern Korea 9843.6 7.92
Other Countries 8873.3 7.14
Tunisia 6041.2 4.86
Japan 4733.0 3.81
Netherlands 4158.6 3.35
Greece 4048.5 3.26
Jordon 3851.4 3.10
Turkish 3298.1 2.65
United Arabia Emirate 1672.7 1.35
Germany 1490.2 1.20
Yemen 1173.4 0.94
Poland 786.9 0.63
Kuwait 772.3 0.62
Swiss 725.7 0.58
Italy 274.6 0.22
United Kingdom 183.4 0.15
Total 124259.8 100.00
Source: table 4-6 annex
Sesame exports to selected Arab-countries(2000-2009)
50000
45000
40000
35000
Egypt
V au e (U S $m illio n s)
30000
Syria
Lebanon
25000 Saudi Arabia
Jordan
United Arabia
20000
Yemen
15000
10000
5000
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Years
Figure (5.2): Trends of selected Arab countries importing sesame from
Sudan during 2000-2009.
Source: Annex Table 5.6

CHAPTER SIX
Results and Discussion of the Economic Analysis, Temporal
and Spatial Analysis of Sesame Production and Marketing in
Gadarif and North Kordofan States
6.0. Introduction
This chapter presents the budget analyses method and PAM analyses method
and results of production and marketing activities of sesame crop in Gadarif
state and North Kordofan state. The budget analyses attempts to reveal
financial performance of the production and marketing process while the
PAM attempts to analyze the extent of market distortion created by
government intervention taking both the financial and economical aspects
together into consideration.
6.1. Budget analyses results of sesame production in Gadarif and North
Kordofan States
6.1.1. Production variable costs:-
The information on sesame production costs for the season 2008/09 were
obtained from the field survey including cost of land rent, cleaning,
ploughing, seeds, first and second cultivation, first and second weeding,
harvesting, storage, sacks, transportation. All costs were calculated in SDG
per feddan (tables 6.1 and 6.2)

Table (6.1): Estimated returns and cost of sesame Production for
Gadarif (SDG/feddan)
Items Costs Percent of Total cost
Cost of rent 9.55 5.51
Cost of cleaning 8.37 4.83
Cost of ploughing 8.39 4.84
Cost of seeds 6.07 3.50
Cost of cultivation 7.73 4.46
Cost of second cultivation 0.05 0.03
Cost of first weeding 27.47 15.86
Cost of second weeding 16.98 9.80
Cost of harvest 54.14 31.25
Cost of wakeel 3.26 1.88
Transport 3.01 1.74
Cost of sack 2.73 1.58
Interest rate 0.75 0.43
Zakat 24.46 14.12
Storage 0.30 0.17
Productivity of this season (kantar/Fed) 2.37
Selling prices 107.25
Revenue 255.05
Total Cost 173.27 100.00
Gross Margin 81.78
Gross Margin kantar 34.51
Table (6.2): Estimated returns and cost of sesame Production for North
Kordofan (SDG/feddan)
Items Costs Percent of Total cost (%)
Cost of rent 8.90 6.21
Cost of cleaning 12.77 8.91
Cost of ploughing 10.16 7.10
Cost of seeds 6.09 4.25
Cost of cultivation 11.32 7.90
Cost of second cultivation 5.09 3.56
Cost of first weeding 21.75 15.19
Cost of second weeding 10.04 7.01
Cost of harvest 35.65 24.89
Cost of wakeel 0.00 0.00
Zakat 17.64 12.32
Storage 0.00 0.00
Cost of sack 2.02 1.41
Transport 1.79 1.25
Selling prices 90.81
Productivity of this season per kantar/ Fed 1.74
Revenue 157.56
Total Cost 143.23 100.00
Gross Margin 14.33
Gross Margin kantar 8.26
(i) Cost of rent:
Usually crop producers have their own lands under traditional usufruct right.
However in Gadarif State under mechanized farming system, farmers obtain
their land under long term lease arrangements from the government. Still
under both traditional and mechanized rain-fed crop production systems
farmers used to rent land from each other for a certain period of time. The
average cost of rent was about SDG 9.55 per feddan and SDG 8.9 SDG per
feddan for Gadarif and North Kordofan states respectively
(ii) Cost of land preparation
(a) Cleaning cost:-
Land cleaning involves manual trees cutting and burning of trees and bushes
before the onset of rainfall (February to May). The average costs of cleaning
were SDG 8.37 per feddan and SDG 12.77 per feddan in Gadarif and North
Kordofan States respectively.
(b) Ploughing cost:-
Ploughing operations were carried out by the harrow wide level disc after
rainfall to decrease the intensity of early growing weeds and prepare a good
bed for the small seeds of sesame. Most of the farmers cultivated their
sesame after performing one ploughing carried out late to control late
growing weeds.
Tractor mounted ploughs were used in Gadarif stats and sporadically in clay
soils in North Kordofan state. Most of the farmers in North Kordofan used
animal drawn ploughs on sandy and Qoz soils. The average costs of
ploughing were about SDG 8.39 per feddan and SDG 10.16 per feddan for
Gadarif and North Kordofan States respectively.
(iii) Cost of seeds and sowing:-
Seeds and sowing date are considered as critical factors that affect sesame
productivity. Delays in sowing date beyond optimum dates under rainfed
condition would reduce the crop productivity (Mohamed, 1982 and Clyston,
1983). According to Ibrahim (1965) the optimum sowing date of sesame
would be on the first or second weed of July. Farmers use seeds from
previous crop or from the market. The average costs of seeds were about
SDG 6.07 per feddan and SDG 6.09 per feddan for Gadarif and North
Kordofan States respectively.
Sowing started early from the first to second week of July and the average
costs of sowing were SDG 7.73 per feddan and SDG 11.32 per feddan and
the average costs of a second sowing SDG 0.05 per feddan and SDG 5.09
per feddan for Gadarif and North Kordofan States respectively.
(iv) Cost of weeding
Weeding was carried out manually at a high cost due to its labour intensive
operation. Early weeding was more expensive than late weeding depending
on labor availability and competition of labor demand.
Disk harrowing results in uneven distribution of sesame seeds and an
irregular crop stand; thus it creates a difficulty for machinery weed control.
Hence the introduction of manual weeding becomes expensive. The cost of
two weeding was about SDG 44.45 per feddan and SDG 31.79 per feddan
for Gadarif and North Kordofan States respectively.
(v) Cost of harvesting
Sesame harvesting was carried out as fast as possible to avoid waste of the
crop through shuttering of the seeds. Harvesting operation required a large
number of labor distributed through out the field at the same time. The main
problem facing sesame harvesting is the loss of seeds when the capsules are
dry. Sesame is harvested manually by traditional tool (mongel) by cutting
the entire plant or individual branch which are then laid in bundles and tied
and placed on vertical drying racks (tukul, about 10 tukul Hila) fully dry
bundles are shaken with the heads facing downward to remove the seeds on
a large cloth sheet on the ground and are packed into sacks. Sometimes a
second threshing is carried out several weeks later to gather seeds from pods
that had not fully dried by the first threshing.
The farmers in the study area indicated that sesame harvesting was carried
out as fast as possible to avoid waste of the crop through shuttering of the
seeds. Harvesting operation required a large number of labor distributed
through out the field at the same time. The main problem facing sesame
harvesting is the loss of seeds when the capsules are dry.
The local varieties shutter at harvest time, and if not handled well would
lead to an expected loss of 2.5 kg/feddan in productivity (Ibrahim 1965).

Khidir (1980) mentioned that the cost of harvesting represented about 65%
to 70% of production cost.
The Ministry of Agriculture found that labor cost for harvesting sesame
accounted to about 50% of total cost of production in four mechanized
farming regions in 1996/98 season. Adnan (1999) found that 87% of the
50% of the cost of harvest were due to cutting of the crop. Khider and
Kambal (1990) and the Arab Organization for Agricultural Development
(AOAD) (1995) found the cost of manual harvesting to reach 50% of the
total cost of sesame production at that time.
This study estimated the cost of harvesting to incur the highest cost among
all cost items of sesame production; this was due to manual harvesting
which was a labor intensive operation. The high demand for harvest labor
dictated an average cost of SDG 54.14 per feddan and SDG 35.65 per feddan
for Gadarif and North Kordofan States respectively.
(vi) Cost of sacks and threads
The number of sacks used by producers depended on their level of
production. The farmers obtained used and new sacks from local markets.
The average costs of sacks were about SDG 2.73 per feddan and SDG 2.02
per feddan for Gadarif and North Kordofan States respectively.
(vii) Zakat:
Zakat is taken from farmers whose production reaches Nisab (6 sacks and 20
malua). The quantity taken by government is one tenth (ushur) it was about
for Gadarif and North Kordofan States respectively. The cost of zakat was
SDG24.46 and SDG 17.64 for Gadarif and for North kordofan.
6.1.2. Total variable cost
The total variable costs were SDG 173.27 per feddan and SDG 143.24 per
feddan for Gadarif and North Kordofan States respectively.
6.2. Gross Revenue
The farmer is a price taker. Differences in farm gate prices may take place
due to climatic effects and other economical factors (export openings).
The farm gate prices were SDG 107.25 per Kantar and SDG 90.81 per
Kantar for Gadarif and North Kordofan States respectively (table 6.3).
The average gross revenue was estimated at SDG 255.05 per kantar and
SDG 157.56 per Kantar for Gadarif and North Kordofan States respectively.
6.2.1. Gross margin revenue:
The gross margin revenue were SDG 81.78 per feddan and SDG 14.33 per
feddan for Gadarif and North Kordofan States respectively, and the % gross
margin were 32% for Gadarif and 9.1% for North Kordofan.
Table (6.3): Comparison of farmer production costs and net margin
of sesame in the production areas (2008-2009)
Items Gadarif North Kordofan
Gross revenue SDG/Fed 255.o5 157.56
Price (SDG/Kantar) 107.25 90.81
Total variable Cost SDG/Fed 173.27 143.23
Share of harvesting cost from Total

31.25% 24.89%
cost
Share of weeding cost from Total cost 25.66% 22.2%
Productivity (Kg/Fed) 105.44 77.03
Productivity(Kantar/Fed) 2.37 1.74
Net profit 81.78 14.33
Gross margin% 32.06% 9.09%
Cost of Kantar 73.11 82.55

6.3. Results and Discussion of the PAM analyses:
6.3.1. Financial and Economic profits (D, H):
Table (6.4) gives a summary of PAM for sesame crop performance for
2008/09. The table indicated positive financial and economic profits for all
markets. The financial profits were found to incur less value than the
economic profits reflecting high levels of taxes and fees in favor of the
government and the national economy. The relatively low financial profits
implied poor incentives given to producers that would not lead to more
effective role in domestic and export markets of sesame crop in the three
markets. The financial and economic profits were higher in case of Gadarif
compared to those of North Kordofan state (El Obeid and Om Rawaba
markets).
Table (6.4): Financial and economic profitability of sesame

production in SDG/feddan in Gadarif and North Kordofan states
Gadarif Gadarif El Om Remark
with without Obied Rwaba
finance finance
Financial profit 64.21 90.65 23.679 23.683 Positive
(D=A-B-C)
Economic profit 144.88 167.97 87.196 72.965 Positive
(H=E-F-G)
Source: Annex Tables 6.1, 6.2, 6.3 and 6.4.

6.3.2. Effect of Policy and other Divergence (Market Distortions):
From table 6.5 the net transfers were more conspicuous in case of Gadarif
market than those of El Obeid and Om Rwaba markets. The negative net
transfers of the output and the positive net transfers of the domestic factors
of production implied tax charges. The negative transfers of the tradable
inputs indicated presence of subsidies. In all, the total net transfers were
negative reflecting an over all taxes crowding out the effect of the subsidies
given to the tradable inputs.

Table (6.5): Transfers of sesame production in Gadarif and North
Kordofan States (SDG/feddan)
Gadarif Gadarif El Obied Om Remarks
with without Rwaba
finance finance
Output -47.93 -41.90 -40.15 -25.86 Negative
transfer (tax)
(I=A-E)
Input -2.10 -4.45 -5.02 -5.02 Negative
transfer (subsidy)
(J=B-F)
Factor 34.84 39.87 28.39 28.45 Positive
transfer (tax)
(K=C-G)
Net transfer -80.67 -77.32 -63.52 -49.28 Negative
(L=D-H) (tax)
Source: Source: Annex Tables 6.1, 6.2, 6.3 and 6.4.

6.3.2.1. Competitiveness:
The most important determinant coefficient of the competitiveness at the
marketing level is the Domestic Resources Coefficient ratio (DRC), the
international value added (IVA), and the coefficient of the international
competitiveness (CIC).
If DRC is lower than one indicates Sudan has comparative advantage in
producing sesame, (in other word that few domestic resources are used to
earn more foreign exchange). Positive IVA means an international
competitiveness of Sudanese sesame exports. If CIC is lower than the
exchange rate the commodity is economically profitable and vice versa.
From table (6.6) it was clear that sesame crop proved to be competitive in all
markets (DRC less than one). The competitiveness of the sesame in Gadarif
market in both cases, whether financed by official banking system or not,
was found to be more pronounced than the competitiveness of the crop in the
two markets of North Kordofan.

Table (6.6) Competitiveness of sesame production
and exports in Gadarif and North Kordofan states
Gadarif Gadarif El Om Remarks
with without Obied Rwaba
finance finance
DRC(G/E- 0.413 0.391 0.493 0.534 Competitiveness
F)
IVA(E-F) 108.530 117.79 73.506 66.851 Competitiveness
CIC(G/IVA) 0.967 0.914 1.154 1.249 economically
profitable
6.3.2.2. Nominal protection coefficient NPC and effective protection
coefficient EPC:
Table (6.7) shows the Nominal Protection Coefficient (NPC), the Effective
Protection coefficients (EPC) and the Nominal Protection for Tradable
Inputs (NPI). It was observed that the exports and domestic marketing of
sesame crop had been highly taxed at almost the same level in the three
markets. Similarly the NPI values being less than one in all areas indicated a
subsidy to the imported inputs of sesame, namely sacks and pesticides.
Overall, same as above findings sesame is a highly taxed crop.

Table (6.7) Implicit and direct taxes on sesame crop
in Gadarif and North Kordofan states
Gadarif Gadarif El Obied Om Remarks
with without Rwaba
finance finance
NPC = A/E 0.823 0.860 0.798 0.859 Taxes
EPC = A-B 0.814 0.864 0.807 0.867 Taxes
E-F
NPI(B/F) 0.910 0.812 0.812 0.812 Subsidy
6.4. Temporal Data Analysis and Discussion:
Figure (6.1): Sesame prices in Sudan from (January 2000 to December
2009), (1) FOB Sesame prices (FP), (2) Gadarif Sesame prices (GP), (3) El
Obeid Sesame prices (OBP) and (4) Om Rwaba sesame prices (OMP)
increased in 2007. FOB price reached its peak value of US$ 2500/ ton in
2008, and the domestic prices in the three markets reached their peak value
in same year indicating mutual effects by changes in the domestic and the
external markets prices.

Fob price Obaied Local Price
2800 180
2400 160
140
2000
120
1600
100
1200
80
800
60
400 40
0 20
00 01 02 03 04 05 06 07 08 09 00 01 02 03 04 05 06 07 08 09
Omrawaba price Gadarif Price

160 200
140
160
120
120
100
80
80
60
40
40
20 0
00 01 02 03 04 05 06 07 08 09 00 01 02 03 04 05 06 07 08 09
Source: drawn from annex table 6.1.
Fig. (6.1): FOB, GP, OBP, and OMP sesame prices (Jan.2000-Dec.2009)
6.4.1. Descriptive Statistic:
The minimum and maximum months prices does not follow a standard
format or pattern, therefore, can find January with maximum price in one or
more years and at the same time can find January with minimum price in
other years. Note the coefficient of variation experiences high rate of price
variability or (risk, high instability) as shown in tables (6.1 to 6.4).
6.4.1.1. Descriptive Statistic of FOB prices:-
Free on board prices affected by the international prices and world demand
and supply. Table (6.8) shows average of FOB prices in US$ per ton the
months of the maximum FOB prices are from January to March and
October, November and August. But the months of the minimum FOB price
from October to March and from June to August.

Table (6.8): Sesame FOB price (US$/Ton) for 2000-2009
FOB 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Jan 589.6 503.1 435.3 629.3 759.0 868.4 658.0 437.8 1363.4 1637.5
Feb 662.1 250.9 393.9 428.5 711.3 824.5 611.6 555.4 1220.6 1274.7
March 615.1 601.0 384.0 612.9 742.1 584.7 611.1 472.6 1178.2 1091.3
April 652.9 577.4 392.4 572.0 854.4 718.5 547.9 783.8 1276.0 1138.1
May 629.1 566.3 388.1 668.9 832.0 562.1 518.2 546.3 1345.4 1099.7
Jun 647.1 550.2 389.4 709.6 859.9 514.1 611.6 895.5 1687.1 1132.1
July 619.8 542.1 382.1 700.0 821.4 717.0 664.7 795.7 1390.5 1135.3
Aug 621.6 495.4 404.0 683.2 858.6 714.6 360.1 1141.9 1619.4 1199.5
Sep 625.9 491.3 433.2 657.9 851.4 720.4 760.6 987.8 1832.7 1165.9
Oct 642.1 499.7 457.2 640.4 493.8 644.8 832.0 987.8 1867.7 1070.1
Nov 632.2 486.1 478.3 647.2 894.4 751.6 753.0 875.8 2521.5 1098.4
Dec 543.3 554.9 429.1 635.2 890.6 806.3 583.4 1016.4 1725.3 1085.9
Average 623.4 509.9 413.9 632.1 797.4 702.2 626.0 791.4 1585.6 1177.4
Max 662.1 601.0 478.3 709.6 894.4 868.4 832.0 1141.9 2521.5 1637.5
Min 543.3 250.9 382.1 428.5 493.8 514.1 360.1 437.8 1178.2 1070.1
St. dev 31.66 89.98 31.93 74.47 111.93 108.27 124.34 235.70 379.92 155.73
CV 5.08 17.65 7.71 11.78 14.04 15.42 19.86 29.78 23.96 13.23
Month of
Max
price Feb Mar Nov Jun Nov Jan Oct Aug nov jan
Month of
Min price Dec Feb July Feb Oct Jun Aug Jan march oct
Source: Sudan Customs authority, (2009).

6.4.1.2. Gadarif prices:-
The fluctuation of sesame prices in the domestic market affects the amount
of Sesame produced and exported. Sesame prices change due to world
demand, external prices and seasonal variation, usually prices of sesame are
lowest at harvest time, and then rise gradually during season and reach it is
peak before next harvests.
Gadarif market is the major auction market in the Sudan. Table 6.2 show
Gadarif average prices, months Marks of maximum average prices are
January, march, April, August, September and in some year December. But
the month's minimum average prices are from July to January.

Table (6.9): Sesame Gadarif local prices (SDG/Kantar)
from (2000-2009)
Gadarif 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Jan 52.7 57.9 34.7 68.2 75.1 79.6 58.6 61.5 117.2 111.7
Feb 56.1 52.9 35.3 71.7 88.6 77.7 57.1 62.9 137.9 113.1
March 60.6 48.7 33.4 69.2 88.5 72.2 59.9 65.8 173.5 121.0
April 59.7 46.0 33.7 74.0 86.0 70.1 74.8 72.8 184.8 122.4
May 56.7 45.0 35.5 76.5 85.2 63.0 61.8 76.1 164.0 129.7
Jun 52.1 40.4 40.4 75.5 82.7 57.7 61.7 73.8 151.0 NA
July 49.9 42.1 41.8 71.5 77.2 57.0 62.5 75.6 160.0 NA
Aug 56.6 40.5 49.0 61.3 83.4 40.0 55.5 80.0 NA NA
Sep 52.1 39.8 45.5 59.0 95.0 56.4 45.0 77.0 136.0 NA
Oct 53.6 39.0 47.0 51.3 90.2 56.4 50.1 77.6 108.7 128.0
Nov 50.1 32.9 52.7 62.2 88.0 56.6 49.3 86.8 122.5 130.5
Dec 57.7 31.7 62.4 74.1 83.2 58.7 54.0 110.5 119.0 134.3
Average 54.8 43.1 42.6 67.9 85.3 62.1 57.5 76.7 143.1 123.8
Max 60.6 57.9 62.4 76.5 95.0 79.6 74.8 110.5 184.8 134.3
Min 49.9 31.7 33.4 51.3 75.1 40.0 45.0 61.5 108.7 111.7
St. dev 3.58 7.61 9.03 7.80 5.51 11.11 7.75 12.87 25.26 8.27
CV 6.54 17.66 21.19 11.50 6.46 17.88 13.48 16.78 17.65 6.68
Month
of Max
price Mar Jan Dec May Sep Jan Apr Dec Apr dec
Month
of Min
price Jul Dec Mar Oct Jan Aug Sep Jan Oct jan
Source: Gadarif Crop Market Administration, Gadarif State (2009).

6.4.1. 3. El Obeid prices:-
El Obeid is major auction market which has an influence over the flow of
crops from the neighboring markets. The prices are not stable and reveal
variation.
Table 6.3 shows El Obeid descriptive statistics of average prices, months of
maximum average prices are from December to February, April, August, but
the months of minimum average prices are from October to January and
March, April, Jun and July.

Table (6.10): Sesame El Obied local prices (SDG/kantar)
from (2000-2009)
Elobied 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Jan 45.5 45.0 29.8 70.5 64.6 70.0 46.3 51.3 91.1 106.5
Feb 50.0 44.7 29.5 69.7 67.4 70.5 44.4 56.5 112.0 98.0
March 49.0 34.5 28.8 75.0 69.0 66.6 49.9 56.1 151.0 102.5
April 46.5 39.2 30.0 80.1 62.8 62.5 52.3 60.6 168.0 104.0
May 40.5 38.0 32.0 82.3 68.9 59.5 50.4 62.6 138.8 97.5
Jun 39.0 36.8 32.0 83.6 65.7 56.5 47.8 64.8 111.3 106.0
July 43.0 37.5 37.5 79.3 63.0 53.5 50.4 65.0 113.0 89.0
Aug 44.0 35.1 46.0 71.0 71.5 55.0 53.8 65.0 NA NA
Sep 45.5 30.0 35.1 64.5 66.3 NA 47.5 NA NA NA
Oct 48.2 27.9 48.0 44.6 69.0 42.5 42.0 57.5 100.0 99.5
Nov 40.8 32.6 52.0 59.2 75.0 47.6 41.0 71.0 116.5 112.0
Dec 43.5 23.2 62.7 64.8 75.8 47.5 42.2 88.5 142.0 116.5
Average 44.6 35.4 38.6 70.4 68.3 57.4 47.3 63.5 124.4 103.2
Max 50.0 45.0 62.7 83.6 75.8 70.5 53.8 88.5 168.0 116.5
Min 39.0 23.2 28.8 44.6 62.8 42.5 41.0 51.3 91.1 89.0
St. dev 3.48 6.39 11.01 11.15 4.22 9.40 4.23 9.93 24.38 7.81
CV 7.80 18.06 28.52 15.85 6.19 16.37 8.93 15.62 19.60 7.57
Month
of Max
price Feb Jan Dec Jun Dec Feb Aug Dec Apr Dec
Month
of Min
price Jun Dec Mar Oct Apr Oct Nov Jan Jan Jul
Source: El Obeid Crop Market Administration, north Kordofan State (2009).

6.4.1.4. Om Rwaba Prices:-
Table 6.4 shows descriptive statistic of Om Rwaba average prices from
(2000 to 2009). The months of maximum average prices are from December
to April, Jun and August. But months of the minimum prices are October to
January, Jun, August and September.

Table (6.11): Sesame Om Rwaba local prices (SDG/kantar)
from (2000-2009)
Om Rwaba 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Jan 41.5 51.0 27.5 66.5 59.5 68.0 42.5 51.5 91.0 116.0
Feb 46.0 46.5 29.0 69.5 60.5 69.0 44.0 53.5 111.5 97.5
March 45.0 52.5 29.0 73.0 64.0 69.0 47.0 54.5 125.0 107.5
April 42.5 35.2 28.5 81.0 62.0 68.0 49.5 60.0 147.5 96.0
May 36.5 34.0 30.5 79.0 62.5 69.0 48.0 64.5 140.0 107.5
Jun 35.0 32.8 34.0 82.0 63.0 62.0 47.0 67.5 110.0 105.0
July 39.0 33.5 42.5 79.5 64.0 61.5 51.5 69.0 120.0 102.5
Aug 40.0 31.1 65.5 77.5 71.5 62.5 51.0 77.0 122.5 93.5
Sep 41.5 26.0 61.0 74.5 69.0 58.0 48.5 72.0 90.0 99.0
Oct 44.2 41.0 49.5 46.0 56.0 42.0 43.5 67.0 102.0 107.0
Nov 36.8 27.0 50.5 56.5 73.5 44.0 39.5 69.5 122.5 105.0
Dec 39.5 22.8 56.0 60.5 90.0 41.5 42.5 88.0 125.0 111.0
Average 40.6 36.1 42.0 70.5 66.3 59.5 46.2 66.2 117.3 104.0
Max 46.0 52.5 65.5 82.0 90.0 69.0 51.5 88.0 147.5 116.0
Min 35.0 22.8 27.5 46.0 56.0 41.5 39.5 51.5 90.0 93.5
St. dev 3.48 9.70 14.03 11.20 8.99 10.90 3.77 10.45 17.49 6.55
CV 8.57 26.85 33.43 15.90 13.56 18.31 8.16 15.80 14.92 6.30
Month of
Max
price Feb Mar Aug Jun Dec feb,mar Aug Dec Apr Jan
Month of
Min price Jun Dec Jan Oct Oct Dec Nov Jan Sep Aug
Source: Source: Om Rwaba Crop Market Administration, North Kordofan
State (2009).
6.4.2. The coefficient of variation CV:
Table 6.5 shows comparison of prices coefficient of variation within years
for the selected markets computed by the standard deviation divided by the
average taken as percentage. The average coefficients of variation were
13.58 for Gadarif prices and 16.18 for Om Rwaba prices, but which varied
between years during the period 2000-2009.
Table (6.12): Comparison of prices coefficient of variation (C.V.) within

years for the selected markets
Gadarif El Obied Om Rwaba

Year FOB price Price Price Price
2000 5.08 6.54 7.80 8.57
2001 17.65 17.66 18.06 26.85
2002 7.71 21.19 28.52 33.43
2003 11.78 11.50 15.85 15.90
2004 14.04 6.46 6.19 13.56
2005 15.42 17.88 16.37 18.31
2006 19.86 13.48 8.93 8.16
2007 29.78 16.78 15.62 15.80
2008 23.96 17.65 19.60 14.92
2009 13.23 6.68 7.57 6.30
Average 15.85 13.85 14.45 16.18
Source: Drawn from tables (6.1) to (6.4).

6.4.3. Price time series analysis:
The regression equation was
Pi = a + b x i
Pi was the price value at time i , a was the constant , b is the coefficient and
x is the value of time during period i. In this equation the average prices
were used as the dependent variables, but time was used as independent
variable. The fitness of the equations is indicated by the R-squared.
Table (6-6) and figures (1 to 4) shows the time trend regression equations for
each of the FOB, GP, OBP, and Om Rwaba prices. The result showed that
there were positive relationship between each price and time.
Table (6.13): Regression equations for the prices
Prices Equation R-adjusted
FOB Price FP =7.29X+352.40 0.47
Gadarif Price GP=0.688X+34.07 0.50
El Obeid Price OBP=0.58X+30.60 0.49
Om Rwaba Price OMP=0.59X+29.74 0.54
Source: Analyses results of time series data using Eviews 5 output program
3000
2500
Fob Price
2000
1500
1500 1000
1000 500
500 0
-500
-1000
00 01 02 03 04 05 06 07 08 09
Time
Residual Actual Fitted
FOB price = 7.29X + 352.40
Fig. (6.2): FOB Prices Fluctuations and trend

200
160
100 120
Gadarif price
80
50
40
0
0
-50
00 01 02 03 04 05 06 07 08 09
Time
Gadarif price = 0.688X + 34.07
Fig. (6.3) Gadarif Prices Fluctuations and trend
Source: drawn from annex table 6.1

200
160
ElObeid price
120
120
80 80
40
40
0
0
-40
00 01 02 03 04 05 06 07 08 09
Time
ElObeid price = 0.58X + 30.60
Fig. (6.4): El Obied Prices Fluctuations and trend

150
100
Omrawaba 80
price 60
50
40
20
0
0
-20
-40
00 01 02 03 04 05 06 07 08 09
Time
Residual Actual F itted
Om Rawaba price = 0.59X + 29.74
Fig. (6.5): Om Rawaba Prices Fluctuations and trend

6.5. Spatial Analysis Result and Discussion:
6.5.1. The result of a unit root tests:
The null hypothesis is of a unit root against a one sided stationary
alternative, i.e. we have
H0 : yt ∼ I(1), (unit root)
H1 : yt ∼ I(0), (stationary)
Table 6.7 showed that the computed absolute value of the t statistic is less
than the DF critical values so can not reject the hypothesis of a unit root of
the levels for three series that is meaning,(time series is non-stationary). On
the other hand, that when we differences the series first time, we found that
the computed value is more than (an absolute value) the critical value, the
hypothesis of a unit root of the first differences is rejected for three series, so
may conclude that they are all 1(1) first differences of the series are
(stationary series) . Philip-Perron (PP) (1987), Unit root test is implemented
to justify the results of the ADF test.

Table (6.14): Statistical and critical values for
the ADF and PP for the selected variables (2000-2009)
ADF P-P
Statistical Critical value Statistical Critical value
values values
% 1% 5% % 1% 5%
FP 2.6227 - 4.0380 - 3.4481 - 3.2827 -4.0373 -3.4478
D(FP) -8.3101 - 4.0387 - 3.4484 -15.6397 -4.0380 -3.4481
GP -1.1568 - 4.0444 - 3.4512 - 1.4168 -4.0422 -3.4501
D(GP) - 6.7857 - 4.0468 - 3.4523 -9.4903 -4.0444 -3.4512
OBP - 3.0368 - 4.0485 - 3.4531 -2.7706 -4.0444 -3.4512
D(OBP) - 8.4337 - 4.0530 - 3.4552 -8.5639 -4.0485 -3.4531
OMP - 2.7505 - 4.0380 - 4.4481 -2.7911 -4.0373 -3.4478
D(OMP) - 9.5886 - 4.0387 - 3.4484 -11.2217 -4.0380 -3.4481
6.5.2. Johansen Co-integration results:
As an illustration, you could also go into a bit more detail on how the Eigen
values and Likelihood Ratio are used to obtain the co-integration rank. We
will apply it to the sesame prices data.).
After ensure that all the variables were of the same order of non-stationary,
and in fact are I (1). Then it could become possible to investigate the
existence of a long – run relationship. First the summary of the Johansen co
integration test is shown in table (6.8). Lag 1 is chosen since the AIC:
Akaike information criterion, SC: Schwarz information criterion, HQ:
Hannan-Quinn information criterion and FPE: Final prediction error have
the lowest value. The model with lag I with chosen with the linear
deterministic trend assumption.
Considering each row in the table in turn, and looking at the first one first, if
the likelihood ratio is greater than the critical value, so we reject the null
hypothesis that there are no co-integrating vectors (H0: r = 0). The same is
true of the second row (that is, we reject the null hypothesis of one co-
integrating vector in favor of the alternative that there are two). Looking
now at the third row, if the likelihood ratio is smaller than the critical value,
we cannot reject (at the 5% level) the null hypothesis that there are two co-
integrating vectors, and this is our conclusion. There are two independent
linear combinations of the variables that will be stationary.
The eigenvalue statistic is used to determine whether co-integrated variables
exist. Co-integration is said to exist if the eigenvalue statistics are
significantly different from zero, Eigen-values are found as (0.3034, 0.2554)
see table 6.8 the likelihood ratio is higher than 5% Critical value.
Table (6.15): Johansen co-integration test for FOB, GP, OBP, and OMP
prices
Likelihood 5 Percent 1 Percent Hypothesized
Eigenvalue Ratio Critical Value Critical Value No. of CE(s)
0.3034 75.798 47.21 54.46 None **
0.2554 38.925 29.68 35.65 At most 1 **
0.0825 8.850 15.41 20.04 At most 2
0.0006 0.064 3.76 6.65 At most 3
*(**) denotes rejection of the hypothesis at 5 %(1%) significance level

L.R. test indicates 2 co integrating equation(s) at 5% significance level
Under the Johansen co integration test, the normalized vector illustrates the
long run elasticity as followed:
lnFP = 3.127 + 0.285 lnGP + 2.136lnOBP - 1.597lnOMP

(0.3633) (0.6201) (0.4406)
The co-integration equation illustrate that the effect of El Obied price is
positive and has more effect than Gadarif price in the long run on the FOB
price due to the β2 =2.136, which is greater than β1 = 0.285 while Om
Rawaba prices have a negative effect on the FOB prices in the long run, as
observed by β3 (-1.597) .
6.5.3. Error correction model (ECM):-

One step of this study was the implementation of the ECM to determine
whether there were any short term relations (the any impacts which the
Gadarif prices (GP), El Obied price (OBP), and Om Rawaba prices (OMP)
variations can have on the FOB price (FP) in the short run). We provided
this short term relationship by the ECM test results. Also the ECM
determines whether apportion of the disequilibria from one period is
corrected in the next period. For example the change in price in one period
may upon the degree of excess price in the previous period.
∆lnFP = α Zt+ δ1∆lnFPt-1 + δ2∆lnGPt-1 + δ3∆lnOBPt-1 + δ4∆lnOMPt-1 + et
lnFP : is the @log (LN) of difference FOB price at time t. ∆FP = FPt – FPt-1
It is assumed that at least one of the coefficients (α) is non zero. The error
terms are white noise. The Zt terms are the residuals from previously
estimated co-integration tests. The focus of the analysis is on Zt terms, as
they provide on explanation of short rum deviations from the long run
equilibrium. These variables indicate the extent to which the system under
consideration deviates from the long run equilibrium. In general, the Zt
coefficients indicate the short run disequilibrium responses of the model. By
using lagged values of Zt , it is implied that the last periods equilibrium
error will affect the current period. If Zt equals zero, then the system is in
equilibrium.
In this study, the impact of the Gadarif (GP), El Obeid (OBP), and Om
Rwaba (OMP) prices variations on FOB price (FP) is examined from
January 2000 – December 2009.

To apply ECM, the first difference of variables are taken, the difference of 4
variables are then tested for ECM. From error correction coefficient (the
value of adjustment parameter (α = -0.347)) suggests that the adjustment
process is relatively fast with about 34.7% of FOB price divergence in the
short run from the long run equilibrium being corrected each month. As
shown in table 6.9.
Table (6.16): Vector Error Correction results for FOB prices

Variables Coefficient T- statistic value
∆lnFPt-1 -0.257 -2.694
∆lnGPt-1 -0.579 -2.171
∆lnOBPt-1 -0.068 -0.315
∆lnOMPt-1 0.173 1.047
Zt -0.347 -4.172
R-squared 0.36
F-statistic 10.7
Table 6.10 shows that El Obeid and Gadarif prices had negative effect on the
FOB prices in the short run and positive effect in the long run as expected
may be due to adjustment to price changes of world demand. But Om Rwaba
prices had positive effect on FOB price in the short run, and negative effect
in the long run may be due the slightly preferred quality type of whitish-red
sesame supply of Om Rawaba.

Table (6.17): Short and long run elasticity
Variables Short run elasticity Long run elasticity
GP -0.579 0.285
OBP -0.068 2.136
OMP 0.173 -1.597
From error correction coefficient (the value of adjustment parameter (α =
0.029)) suggests that the adjustment process is low, with about 3 % of
Gadarif price divergence in the short run from the long run equilibrium
being corrected each month as shown in table 6.11.
Table (6.18): Vector Error Correction results for Gadarif prices
∆lnGPt-1 0.247 1.868
∆lnFPt-1 0.053 1.124
∆lnOBPt-1 0.196 1.842
∆lnOMPt-1 -0.210 -2.567
Zt 0.029 0.706
R-squared 0.12
F-statistic 2.6
From error correction coefficient (the value of adjustment parameter (α =
0.087)) suggests that the adjustment process is relatively low, with about 9
% of El Obeid price divergence in the short run from the long run
equilibrium being corrected each month. As shown in table 6.12.
Table (6.19): Vector Error Correction results for El Obied prices
∆lnOBPt-1 -0.161 -1.234
∆lnFPt-1 0.019 0.326
∆lnGPt-1 0.595 3.668
∆lnOMPt-1 -0.055 -0.549
Zt 0.087 1.725
R-squared 0.17
F-statistic 3.9
From error correction coefficient (the value of adjustment parameter (α = -
0.149) suggests that the adjustment process is relatively fast with about 15 %
of Om Rwaba price divergence in the short run from the long run
equilibrium being corrected each month as shown in the table 6.13.

Table (6.20): Vector Error Correction results for Om Rawaba prices:
∆lnOBPt-1 0.051 o.341
∆lnFPt-1 0.038 0.581
∆lnGPt-1 0.446 2.411
∆lnOMPt-1 -0.250 -2.182
Zt -0.149 -2.576
R-squared 0.21
F-statistic 5.0
6.5.4. Vector Error Correction model:
∆ln(FP) = - 0.347( ln(FP(-1) - 0.285 ln GP(-1) - 2.136 ln OBP(-1) + 1.597
ln OMP(-1) - 3.127 ) - 0.257 ∆ln FP(-1) - 0.579 ∆ ln GP(-1) - 0.068 ∆ ln
OBP(-1) + 0.173 ∆ ln OMP(-1) + 0.008
∆ln(GP) = 0.029 ( (ln(FP(-1) - 0.285 ln(GP(-1) - 2.136 ln OBP(-1) + 1.597
ln OMP(-1) - 3.127 ) + 0.053 ∆ ln FP(-1) + 0.247 ∆ ln GP(-1) + 0.196 ∆ ln
OBP(-1) - 0.210 ∆ ln OMP(-1) + 0.004
∆ln(OBP) = 0.087 ln(FP(-1) - 0.285 ln GP(-1) - 2.136 ln OBP(-1) + 1.597 ln
OMP(-1) - 3.127) + 0.0189 ∆ ln FP(-1) + 0.595 ∆ ln GP(-1) - 0.161 ∆ ln
OBP(-1) - 0.0551 ∆ln OMP(-1) + 0.003
∆ln(OMP) = - 0.149 ln(FP(-1) - 0.285 ln GP(-1) - 2.136 ln OBP(-1) + 1.597
ln OMP(-1) - 3.127) + 0.038 ∆ln FP(-1) + 0.446 ∆ ln GP(-1) + 0.051 ∆ ln
OBP(-1) - 0.250 ∆ ln OMP(-1)) + 0.010

CHAPTER SEVEN
Summary and Conclusions, Recommendations of the Study
7.0. Summary
The main problems of sesame of Sudan are manifested in variability of
production and exports due to dependence on amount and distribution of
rainfall, shattering variety associated with manual harvesting technology,
changes in domestic and external prices, high marketing costs partly because
of poor infrastructure and partly related to the prevailing market structure
and market distortion. All these are environmental and man made causes, of
which this study attempts to focus largely on the latter.
Therefore, the purpose of this study was to assess the government
intervention and related economic factors that had an effect on the
performance of sesame production, marketing and exports of Gadarif and
North Kordofan states. The specific objectives of the study were to assess
the socio-economic factors of producers and traders, estimate the gross
margin revenue of the producers, and market margins cost, competitiveness
and co-integration of the sesame crop.
7.1. The method of the study

The study used primary data, for the season 2008/09, collected from a field
survey questionnaire of the producers in Gadarif and North Kordofan,
trader-exporters of Gadarif, El Obeid and Om Rwaba markets in the two
states. The sample size of the simply randomly selected respondents reached
360 producers (200 in Gadarif, 160 in North Kordofan), 132 traders and
representatives (Wakeels) (59 in Gadarif, 43 in El Obeid and 30 in Om
Rwaba), and 40 exporters (18 in Gadarif, 11 in El Obeid, 5 in Om Rwaba,
and 6 from other states). Secondary data were also obtained from official
sources from the Ministry of Agriculture, Ministry of foreign Trade,
Sudanese Trade Points, Bank of Sudan, and State Ministries of Agriculture.
The data covered the period 2000-2009 including domestic and FOB prices.
The study used descriptive statistics, budgeting, policy analyses matrix
(PAM), time-series temporal and spatial co-integration analyses. These
methods varied between simple and advanced tools including the rigorous
regression method of time series analyses.
7.2. The results of the study

The results of the analyses indicated that about 86% of total producers were
within 30-60 years old group in Gadarif state compared to 64% in North
Kordofan state. Similarly, the traders falling within the same age group were
about 96% of the total respondents in Gadarif market while those in El
Obeid were 88% and Om Rwaba was 80%.
Gadarif sesame producers had university and post-university education to
the tune of about 60.5%, while the North Kordofan producers had primary
and secondary school education accounting to 46% of the total respondents.
Most of the sesame producers in Gadarif (79.5%) were farmers, and the rest
had other jobs mostly as civil service officials (19.5%). Almost all of the
producers of North Kordofan (96.3%) were farmers. Self financing was
reported by (62%) of traders in Gadarif market, (83.3%) by El Obeid traders
and (100%) by Om Rwaba traders.
Considering the market structure of sesame, the study found that the first
largest 4 traders in Gadarif market bought about 75.7% of total sesame
purchase, while the top 8 bought about 86.6%. On the selling side, the
results indicated that the first largest 4 traders sold about 39% of total
sesame sales and the top 8 sold about 50% reflecting an oligopoly situation
in Gadarif sesame market during the study season.
In El Obeid market, the first largest 4 traders had sold 37.9% of the total
sales of sesame and the top 8 traders sold 52.2% altogether, again reflecting
oligopoly practice. But in Om Rwaba, the first largest 4 traders sold about
31.7% of total, and the top 8 traders sold about 39.1% of the total sales. The
exporters’ market seemed to have similar practice as few exporters
controlled the exports of sesame. The top 4 exporters had about 32% of total
exports and the top 8 had 53%.
Regarding the marketing channel and margin cost analyses, the results
portrayed the marketing channel followed sales and purchases between
producers and assemblers and then to exporters in the two states. The
marketing margin cost analyses results indicated that exporters pay between
14.77% - 19.62% of FOB prices, and received net margin between 0.39% in
Om Rwaba as minimum and 4.26% in El Obeid as maximum of the FOB

prices. The share of producer ranged between 71.71%- 76.65% of the FOB
prices. Crop losses whether at Port Sudan or at Gadarif markets incurred the
highest costs, about 27% on average of the total marketing costs, due to
sieving associated physical losses of the crop. Transportation cost also
ranked second representing about 19.24% on average of the total marketing
cost in three markets.
Most of the exports of sesame of Sudan went to the Arab-Asian countries
which imported about 37% of total Sudan exports of sesame during (2000-
2009), followed by the Non Arab- Asian countries (26.4%). Country wise,
Egypt had the highest imports of Sudan sesame, accounting to 16.6% of total
exports of sesame of Sudan, followed by Saudi Arabia (13.5%), and China
(11.1%).
On the economics of sesame production gross margin value was about
SDG 14.33 (gross margin percentage (GMR %) of 9.09%) and SDG 81.78
(GMR % of 32.06%) per feddan for North Kordofan and Gadarif states
respectively. The total variable costs were about SDG 143.23 and SDG
173.27 per feddan for the two states respectively. Harvesting cost was the
highest, about 31.25% for Gadarif and 24.89% for North Kordofan States.
The PAM analyses results showed competitiveness of sesame production
and exports in the states and their three markets, with an average DRC of 0.8
less than one. The NPC and the EPC were also less than one reflecting
levying of implicit taxes on sesame in the three markets. On the other hand,
the NPI was less than one indicating a subsidy on imported inputs.
The temporal analyses results depicted a positive relationship between each
FOB prices, Gadarif, El Obied and Om Rwaba prices and time, also found
that instability of prices of sesame as measured by the coefficient of
variation.
Co-integration analysis was conducted; firstly The Unit root analysis was
used to test stationary of time series. For that reason, the augmented dickey
Fuller (ADF) and Phillips and Perron (PP) test was implemented to
determine whether the series has a unit root. . After that Integration was
found to exist, and the series were integrated in the same order 1(1), then co-
integration tests were performed. The Johansen Co-integration results
found that Port Sudan (FOB), Gadarif, El Obeid, and Om Rwaba markets
were co-integrated at 5% level of significance. It was found that local prices
have affected FOB price. Following 120 month of monthly observation
these 4 variables were not found to be stationary separately, but where the
analysis was conducted with variables together, they were found to be co-
integrated and they move together in the long run.
However, the co-integration results showed that El Obeid and Gadarif prices
had a positive effect on the FOB prices (and β2=0.2.136 and β1= 0.285)),
while Om Rwaba prices had negative effect on the FOB price in the long run
(β3 = -1.597),
Similar results were obtained for the short run analyses. Om Rwaba had
positive effect of (δ4 = 0.17) and Gadarif and El Obeid had negative effects
of (δ2 = -0.58 and δ3 = - 0.07) on the FOB price.
7.3. Conclusions of the study

The conclusions of the study are as follows:
- Producers and traders in Gadarif, North Kordofan states were economically
active. Education level of the farmers was higher in case of Gadarif giving
them an advantage over those of North Kordofan farmers. The education
levels in the case of the traders seemed to be similar and hence the practices
were almost similar, supported by high capital, resulting into an oligopoly
situation in the three markets, and relatively low in the export market.
- Physical losses and transportation costs rendered the highest share among
the total marketing costs which require revision and improvement. The
Arab- Asian countries, and Egypt, Saudi Arabia and China imported the
highest share of sesame exports of Sudan, which calls for further
diversification of the exports of sesame of Sudan to other countries.
- Gadarif producers had more profits from sesame than those of North
Kordofan and harvesting cost was the highest in the two states. Despite the
competitive position of sesame production and exports the crop was highly
taxed by both explicit and implicit taxes. This might act as a disincentive for
production and trade of the crop in Sudan.

- Market structure analyses results revealed high concentration of buyers of
sesame crop due free entry constraints because of high capital and trade
permit license requirements.
- Market conduct analysis results indicated high possibility of existence of
collusion on price determination among sesame purchasers, while selling
market structure reflected moderate oligopoly, with less influence on price
setting compared to buying activity.
- Market performance indicated high prices exercised on consumers
compared low prices for producers implying that traders were the main
beneficiaries. Therefore, the market performance of sesame is inefficient due
to presence of oligopsony and oligopoly.
- FOB and domestic sesame prices revealed integration with time (temporal),
while the FOB prices and the three markets revealed consistent co-
integration behavior in the short and the long run. El Obeid and Gadarif
prices had negative effect in the short run and positive effect on the FOB
prices in the long run as expected perhaps brought about by the adjustment
of exporters to the expected price changes of world demand. However, the
Om Rwaba positive relation with FOB prices in the short run may be
explained by its exports of a relatively better quality of sesame, the whitish-
red sesame. In the long run the sesame of Om Rwaba may be exhausted and
exporters resort to El Obeid market to supplement their export need. The

long run exhaustion may be affected by high lands and hills which may
result in high transportation cost on seasonal sandy feeder roads.
Thus the price signals along time can help in directing production and trade
of sesame in Sudan. Hence there is need for revising the marketing structure,
market-margin-cost and market infrastructure to develop more transparent
marketing situation for demanded quality of sesame of Sudan in both the
domestic and export markets.
7.4. The recommendations of the study

The study recommended the following:
• To reduce sesame harvesting cost through:
o improvement in variety (non-shattering) ,
o use of mechanical harvesting adapted to local situation,
• To reduce marketing costs through:
o improvement of the sieving process at production areas to
reduce physical losses,
o reducing transportation cost of sesame from production areas to
market place and export ports (Port Sudan and Halfa), through
improved infrastructure and improved transporting means,
• To revise marketing structure policy, laws and regulations to reduce

concentration practices of sellers and buyers at sesame markets and
export level,
• To improve quality of sesame production for exports.
• Provision of finance to traders to reduce oligopoly effect.
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‫اﻟﻤﺮاﺟﻊ اﻟﻌﺮﺑﻴﺔ‪:‬‬
‫ادارة اﺳﻮاق اﻟﻤﺤﺎﺻﻴﻞ ‪ .(2010) .‬ﺳﻮق ﻣﺤﺼﻮﻻت اﻟﻘﻀﺎرف – وزارة اﻟﻤﺎﻟﻴﺔ واﻻﻗﺘﺼﺎد ﻋﺎم‬
‫‪ – 1970‬وﻻﻳﺔ اﻟﻘﻀﺎرف ‪.‬‬
‫ادارة ﺳﻮق ﻣﺤﺼﻮﻻت اﻻﺑﻴﺾ ‪ .(2009) .‬ﺳﻮق ﻣﺤﺼﻮﻻت اﻻﺑﻴﺾ – اﻟﻤﺎﺿﻰ ن اﻟﺤﺎﺿﺮ ‪،‬‬
‫اﻟﻤﺴﺘﻘﺒﻞ ‪ .‬ﻣﺤﻠﻴﺔ ﺷﻴﻜﺎن – وﻻﻳﺔ ﺷﻤﺎل آﺮدﻓﺎن ‪.‬‬
‫اﻻدارة اﻟﻌﺎﻣﺔ ﻻﺳﻮاق اﻟﻤﺤﺎﺻﻴﻞ ‪ . (2009) .‬ﺳﻮق ﻣﺤﺼﻮﻻت ام رواﺑﺔ ‪ .‬ﻧﺒﺬة ﺗﺎرﻳﺨﻴﺔ ﻟﺴﻮق‬
‫ﻣﺤﺼﻮﻻت أم رواﺑﺔ – وﻻﻳﺔ ﺷﻤﺎل آﺮدﻓﺎن ‪.‬‬
‫ﻋﺒﺪ اﻟﺤﻠﻴﻢ آﺮاﺟﺔ وﺁﺧﺮﻳﻦ ‪ . (2010) .‬ﻣﺒﺎدئ اﻻﻗﺘﺼﺎد اﻟﺠﺰﺋﻰ – دار ﺻﻔﺎء ﻟﻠﻨﺸﺮ واﻟﺘﻮزﻳﻊ –‬
‫ﻋﻤﺎن – اﻻردن ‪.‬‬
‫ﻋﺠﻴﻤﻰ ﻋﺒﺪاﻟﻠﻄﻴﻒ اﺣﻤﺪ ‪ .(2010).‬اﻻﺗﺠﺎﻩ واﻟﺘﻐﻴﻴﺮ ﻓﻰ ﺣﺼﺔ اﻟﺴﻮدان ﻓﻰ اﻟﺴﻮق اﻟﻌﺎﻟﻤﻰ ﻟﻠﺴﻤﺴﻢ‬
‫وﻓﺮص اﻟﺘﺤﺴﻴﻦ ‪ :‬ورﻗﺔ ﺗﺤﻠﻴﻠﻴﺔ ‪ .‬وزارة اﻟﺰراﻋﺔ واﻟﻐﺎﺑﺎت وﺣﺪة اﻻﻧﻀﻤﺎم ﻟﻤﻨﻈﻤﺔ اﻟﺘﺠﺎرة‬
‫اﻟﻌﺎﻟﻤﻴﺔ ورﻗﺔ ﺑﺤﺜﻴﺔ رﻗﻢ )‪ (1‬اﺑﺮﻳﻞ ‪2010‬م‪.‬‬
‫ﻣﻘﺎﺑﻼت ﺷﺨﺼﻴﺔ ‪:‬‬
‫اﻟﺴﻴﺪ‪ /‬ﻓﺎﺋﺰ اﺑﻜﺮ ﻋﺒﺪ اﻟﺮﺣﻤﻦ – وزارة اﻟﻤﺎﻟﻴﺔ – اﻟﺒﻮرﺻﺔ ‪ -‬وﻻﻳﺔ اﻟﻘﻀﺎرف ‪.‬‬
APPENDICES
Annex table (1.1): Planted, Harvested Area, Production, Yield in Sudan
Period &Percentage of Export 90/1991 - 07/2008
Planted Harvested
Production Yield
Year area area
(000Ton) (Kg/Fed)
(000Fed) (000Fed)
90/1991 2062 1104 80 72.46
91/1992 1692 1130 84 74.34
92/1993 4006 2968 242 81.54
93/1994 3545 2931 176 60.05
94/1995 3933 3206 170 53.03
95/1996 4450 3476 303 87.17
96/1997 5571 4427 416 93.97
97/1998 4454 3646 208 57.05
98/1999 4025 3330 261 78.38
99/2000 6228 5302 339 63.94
00/2001 5201 4397 279 63.45
10/2002 4739 3767 295 78.31
20/2003 2781 1853 121 65.29
30/2004 4369 3768 469 124.47

Planted
Harvested area Production Yield
Year area
(000Fed) (000Ton) (Kg/Fed)
(000Fed)
40/2005 4485 3592 273 76.00
50/2006 5311 4339 400 92
60/2007 3378 2672 242 91
70/2008 4351 3483 346 99
Mean 4143.4 3299.5 261.3 78.3
Standard deviation
1159.1 1099.3 110.1 17.7
(Stdv)
Coiffient of
0.28 0.33 0.42 0.23
variation.(C.V.)
Agriculture and Forestry.

Annex table (1.2): Gadarif State: Planted, Harvested Area, Production
and Yield Period 90/1991-2005/04
Year Sesame
Area (000 Fed)
Production Yield
Planted Harvested
(000 Ton) (Kg/Fed)
90/1991 400 300 27 90
91/1992 400 350 31 89
92/1993 893 716 79 110
93/1994 500 490 39 80
94/1995 715 627 56 89
95/1996 1250 1065 119 112
96/1997 1100 925 108 117
97/1998 873 858 88 103
98/1999 725 628 48 76
99/2000 1302 1125 79 70
00/2001 1050 966 75 78
10/2002 737 658 46 70
20/2003 431 330 27 82
30/2004 1010 916 114 124
40/2005 892 688 55 80

Year Sesame
Area (000 Fed)
Production Yield
Planted Harvested
(000 Ton) (Kg/Fed)
50/2006 749 685 69 100
60/2007 632 518 47 90
70/2008 576 475 70 148
Mean 790.8 684.4 65.4 94.9
Standard 278.2 250.2 28.8 20.8
deviation (Stdv)
Coefficient of 0.35 0.37 0.44 0.22
variation.(C.V.)

Annex table (1.3): Kordofan State: Planted, Harvested Area,
Production and Yield Period 90/1991-2005/04
Year Sesame
Area (000 Fed)
Planted Harvested Production Yield
(000 Ton) (Kg/Fed)
90/1991 815 268 9 33.6
91/1992 550 255 10 39.2
92/1993 1326 815 40 49.1
93/1994 1744 1390 60 43.2
94/1995 1730 1500 54 36
95/1996 1289 902 22 24.4
96/1997 1786 1256 71 56.5
97/1998 1527 1189 47 39.5
98/1999 1707 1350 85 63
99/2000 1914 1587 56 35.3
00/2001 1596 1445 54 37.4
10/2002 1801 1372 77 56.1
20/2003 1355 908 41 45.2
30/2004 1560 1303 81 82.6
40/2005 1906 1480 85 59

Year Sesame
Area (000 Fed)
Planted Harvested Production Yield
(000 Ton) (Kg/Fed)
50/2006 2123 1880 156 85
60/2007 1587 1229 107 91.6
70/2008 2100 1605 154 113
Mean 1578.7 1207.4 67.2 55
Standard deviation (St. dv) 405.1 433.2 41.3 23.8
Coefficient of
variation.(C.V.) 0.26 0.36 0.61 0.43

Annex table (1.4): Sesame production of Sudan Gadarif and North
Kordofan (1990-2007)
Year Sesame production(000 Ton)
Sudan Gadarif North
Kordofan
90/1991 80 27 9
91/1992 84 31 10
92/1993 242 79 40
93/1994 176 39 60
94/1995 170 56 54
95/1996 303 119 22
96/1997 416 108 71
97/1998 208 88 47
98/1999 261 48 85
99/2000 339 79 56
00/2001 279 75 54
10/2002 295 46 77
20/2003 121 27 41
30/2004 469 114 81
40/2005 273 55 85
Year Sesame production(000 Ton)
Sudan Gadarif North
Kordofan
50/2006 400 69 156
60/2007 242 47 107
70/2008 346 70 154
Mean 318 65.4 67.2
Standard deviation (St. dv) 261.3 28.8 41.3
Coefficient of 0.44
110.1
variation.(C.V.) 0.61

Annex table (1.5): Prices in Gadarif and El Obeid (SDG /Kantar)
1999 2000 2002 2003 2004 2005 2006 2007

Year
Mon Gadarif El Obied Gadarif El Obied Gadarif El Obied Gadarif El Obied Gadarif El Obied Gadarif El Obied Gadarif El Obied Gadarif El Obied
Jan. 3658 2950 5272 4550 3527 2752 6979 7010 7985 6395 7900 5844 5725 5078
Feb. 3629 3100 5590 5000 3422 3050 7200 6891 8952 6633 7731 5815 5407 5548
Mar. 3699 3100 6038 4300 3407 3002 7243 6880 9030 8065 7245 6018 3290 5615
Apr. 3385 2265 5933 4803 3417 2816 7480 6962 8657 7500 6914 6182 7191 6052
May. 3310 2800 5535 4048 3562 3146 7702 7005 8470 7055 6306 6484 7593 6550
June. 3380 3100 5288 3900 4350 3150 7114 8000 8312 6600 5922 5780 7438 4197
July. 2895 3100 4940 4300 4310 3350 6536 7503 8141 6303 6041 6250
Aug. 2750 3100 5512 4403 4720 4586 6245 6808 8500 7153 6000 5000
Sep. 3050 3100 5305 4553 4870 4450 5953 6475 7755 6630 5915 4500
Oct. 2459 N.A. 5035 4820 5020 4800 5370 4477 8859 6895 5830 4000
Nov. 2401 N.A. 5026 4525 5210 5208 6032 5895 8509 7498 5818 3797
dec. 2527 N.A. 5671 4745 6198 6300 6412 6477 8519 7575 5971 5448
Average 3089 3557 5429 4462.3 4111 3884 6704 6699 8474 7025 6466 5427
Source: General Administration for Agricultural Economics and Planning, Ministry of Agriculture and Forestry.
Annex table (1.5): Sudan Exports of Sesame during (1990-2009)
Quantity Export
Year (000 Ton) Value (000 US$)
1990 41.7 54
1991 34.4 34.7
1992 82.815 46.294
1993 125.75 68.2
1994 130.543 66.742
1995 97.395 80.449
1996 157.405 141.132
1997 171.926 117.312
1998 167.231 104.752
1999 165.477 126.932
2000 212.784 146.92
2001 183.084 104.49
2002 155.393 74.575
2003 108.692 74.371
2004 186.04 139.241
2005 154.675 118.575
2006 219.047 167.039

Quantity Export Value (000 US$)
Year (000 Ton)
2007 111.798 92.787
2008 96.744 141.846
2009 137.659 143.352
Mean 140.8 98
Standard deviation (Stdv) 53.5 39
Coefficient of
variation.(C.V.) 0.38 0.4
Source: Ministry of Foreign Trade and Sudanese trade point, 2006.

Annex table (5.1): Marketing costs and margins
for one ton of sesame, originating in Gadarif with finance (SDG/Ton)
Value Percent of Percent of
Market Participants and total cost FOB price
items (%) (%)
Producer price 2226 78.07 75.35
Buying price 2226 78.07 75.35
Loading and unloading 12.47 0.44 0.42
Transportation 33.84 1.19 1.15
Storage 20.03 0.70 0.68
local taxes 11.13 0.39 0.38
Local fees 0 0.00 0.00
Interest on lone 1.89 0.07 0.06
Marketing Cost for
Assembler 79.36 2.78 2.69
Quantity (Ton) 1727
Sub-Total 2305.36 80.89 78.08
Assembler Net Margin 136.56 4.75 4.58
Selling Price 2441.92 85.64 82.66
Buying price 2441.92 85.64 82.66
Loading and unloading 0 0.00 0.00
Sieving 0 0.00 0.00
Storage 11.8 0.41 0.40

Percent of Percent of
Market Participants and total cost FOB price
items Value (%) (%)
Buying of empty sack 18.92 0.66 0.64
Local Transportation 0 0.00 0.00
Record fees 1.35 0.05 0.05
Market Fees 38.96 1.37 1.32
Sieving, sack, mark 64.73 2.27 2.19
Gadarif Losses 134.28 4.71 4.55
Transport to Port Sudan 44.88 1.57 1.52
Interest rate 1.21 0.04 0.04
Commission (Omolla) 16.7 0.59 0.57
Gadarif Port Sudan Expenses 54.38 1.91 1.84
Market Cost for Exporter 409.47 14.36 13.86
Total Marketing Cost 488.83 17.14 16.55
Total Cost 2851.39 100.00 96.52
Exporter Net Margin 102.86 3.61 3.48
Selling Price 2954.25 100.00
F.O.B. Price in US $ 1262.5
Exchange Rate SDG/US $ 2.34
Quantity (Ton) 3301.75
Source: field survey 2009

For one ton of sesame, originating in Gadarif without finance
(SDG/Ton)
Value Percent Percent of
Market Participants and of total FOB price
Items Cost
Producer price 2365.74 79.83 77.96
Buying price 2365.74 79.83 77.96
Storage 29.93 1.01 0.99
local taxes 11.13 0.38 0.37
Local fees 0 0.00 0.00
Marketing cost for
Assembler 88.44 2.98 2.91
Quantity (Ton) 569
Sub-Total 2459.06 82.98 81.04
Selling Price 2551.95 86.11 84.1
Buying price 2551.95 86.11 84.1
Loading and unloading 0 0.00 0.00
Sieving 0 0.00 0.00

Market Participants and
Percent of Percent of
Items Value total Cost FOB price
Storage 13.8 0.00 0.00
Local Transportation 0.09 0.00 0.00
Market Fees 41.5 1.40 1.37
Record fees 3.64 0.12 0.12
Sieving, sack, mark 63.91 2.16 2.11
Gadarif Losses 127.8 4.31 4.21
Interest rate 0 0.00 0.00
Gadarif Port Sudan Expense 54.62 1.84 1.80
Exporter Market Cost 411.57 13.89 13.56
Total Cost 2963.52 100 97.66
Selling Price 3034.49 100

For one ton of sesame, originating El Obeid (SDG/Ton)
Value Percent Percent of
Market Participants and of total FOB price
Items cost
Producer Price 2027.25 74.90 71.71
Buying price 2027.25 74.90 71.71
Storage 10.39 0.38 0.37
local taxes 6.68 0.25 0.24
Local fees 66.78 2.47 2.36
Marketing cost for Assembler 134.85 4.98 4.77
Quantity (Ton) 99
Sub-Total 2162.1 79.88 76.48
Selling Price 2272.54 83.96 80.38
Buying price 2272.54 83.96 80.38
Sieving 7.83 0.29 0.28
Storage 14.48 0.53 0.51

Percent of Percent of FOB
Market Participants and Items Value total cost price
Market Fees 13.36 0.49 0.47
Record fees 11.48 0.42 0.41
Port Sudan Expenses 247.51 9.14 8.75
Exporter Market Cost 434.22 16.04 15.36
Physical losses 117.68 4.35 4.16
Total Cost 2706.76 100 95.74
Selling Price 2827.19 100.00
Exchange Rate SG/US $ 2.34

Annex table (5.4): Marketing costs and margins for one ton of sesame,
originating in Om Rwaba (SDG/Ton)
Market Participants and Value Percent of Percent of
Items total cost FOB price
Producer Price 2012.3 76.94 76.65
Buying price 2012.3 76.94 76.65
Storage 27.38 1.05 1.04
Local taxes 6.68 0.26 0.25
Local fees 66.78 2.55 2.54
Cost of Living To 1.88 0.07 0.07
Local transportation 0.01 0.00 0.00
Marketing cost for
Assembler 134.14 5.13 5.11
Sub-Total 2146.44 82.07 81.75
Quantity (Ton) 211
Selling Price 2239.36 85.63 85.29
Buying price 2239.36 85.63 85.29
Transportation 0 0.00 0.00
Sieving 8.68 0.33 0.33

Market Participants and Value Percent of Percent of
Items total cost FOB price
Storage 0 0.00 0.00
Market Fees 0 0.00 0.00
Record fees 6.58 0.25 0.25
Port Sudan Expenses 241.22 9.22 9.19
Exporters market Cost 375.95 14.37 14.32
Physical losses 108.58 14.15 14.14
Total Cost 2615.31 100 99.61
Selling Price 2625.48 100
F.O.B. Price in US $ 1122

Annex table (5-5): Geographical distribution of Sudan sesame exports according to economical sections during the
period between (2000-2009): in (US$/Ton)
Country 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Afro Arabian countries 21814 18412 17699 14169 53160 32435 50575 21200 31360 23978
Non Arabian African countries 13530 230 - - - - - 1025 - 17767
Asian Arabian countries 41810 40158 35812 28109 51949 41734 49237 44958 61306 64071
Non Asian Arabian countries 42274 16619 12868 25838 54116 39823 57968 21625 25962 30743
Western European countries 25910 28606 5074 4095 12671 2992 7381 1932 21873 4159
Eastern European countries 1132 352 258 669 1490 1539 853 2047 1339 579
Southern American countries - - - 299 4624 - - - - 84
Northern American countries 258 - - 25 623 52 1025 - - 139
Scandinavian countries 192 - - 1167 - - - - - -
Igyanosya - - - - 15 - - - - -
Others - 114 2864 - - - - - 6 1832
Total 146920 104491 74575 74371 178642 118575 167039 92787 141846 143352
Source: Bank of Sudan, Annual Reports, several issues

Annex table (5.6): geographical distribution of Sudan sesame exports according to import countries during the
period between (2000-2009) in (US$/ton)
Country 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Japan 16378 2060 782 1784 4452 3010 2761 2542 12323 1238
Korea 24333 13875 3130 16532 23133 7559 5903 - 517 3454
United Kingdom 1634 145 55 - - - - - - -
Turkey 1349 237 6347 2636 9293 4573 3182 1471 2243 1650
China - - - 4506 16160 24175 45709 16766 6573 24401
Egypt 18424 13922 10971 9105 43287 25305 38516 10856 20231 15769
Netherlands 9160 19536 1929 1454 1468 314 1028 333 6364 -
Germany 4595 1742 573 989 236 61 43 - 6553 -
Greece 2174 6881 1874 816 8372 1660 5930 1291 7726 3761
Syria 6848 6296 9912 6150 12415 9445 16862 10127 12496 15119
Lebanon 7439 9530 5408 7658 13075 10976 11592 16138 12993 10991
Saudi Arabia 12458 13629 9906 8660 17023 16918 15629 14898 26806 31261
Jordan 6497 5368 4081 3245 8163 2311 2346 1899 2614 2990
Italy 1212 23 1121 - 404 97 57 - 839 -
United Arabia 4567 2915 1274 1198 416 626 904 845 1513 2469
Yemen 3159 1593 4272 320 143 267 171 251 1411 147
Poland 979 271 235 669 1476 1539 853 1044 281 522
Tunisia 3223 4160 2838 3971 7254 5945 7615 7475 11129 6802
Swiss 6608 12 247 67 - - 59 - 264 -
Kuwait - - - 862 713 1171 1707 800 1421 1049
Others 15883 2296 10629 4749 11117 2623 6102 6056 7549 21729
Total 146920 104491 74575 74371 178642 118575 167039 92787 141841 143352
Source: Bank of Sudan, Annual Reports, several issues
Annex Table (6.1): Sesame financial and economic revenues
and costs in Gadarif market (with finance) in (SDG/feddan)
Revenue Cost Profit
Tradable domestic
Financial Prices(F) 222.30 21.18 136.90 64.21
Financial Prices(N) 243.83 21.18 136.90 85.75
Economic Prices 270.22 23.28 102.06 144.88
Divergence -47.93 -2.10 34.84 -80.87
and costs in Gadarif market (without finance) in (SDG/feddan)
Revenue Cost Profit
Tradable Domestic
Economic Prices 299.345 23.71131 107.6628 167.790
Divergence -41.898 -4.44731 39.8732 -77.324

and costs in El Obeid market in (SDG/feddan)
Revenue Cost Profit
Tradable domestic
Economic Prices 198.745 26.74169 84.807 87.196
Divergence -40.146 -5.01569 28.387 -63.517
and costs in Om Rwaba market in (SDG/feddan)
Revenue Cost Profit
Tradable domestic
Economic Prices 183.217 26.78477 83.468 72.965
Divergence -25.855 -5.02377 28.451 -49.282

Annex table (6.5): Time series of FOB prices, Gadarif prices, El Obeid
prices, and Om Rwaba prices period (January 2000 to December 2009)
FOB El Obeid Om Rawaba Gadarif

prices prices prices prices
Months (US$/Ton) (SDG/Kantar) (SDG/Kantar) (SDG/Kantar)
2000M01 589.61 45.50 41.50 52.73
2000M02 662.05 50.00 46.00 56.08
2000M03 615.12 49.00 45.00 60.61
2000M04 652.85 46.50 42.50 59.65
2000M05 629.14 40.50 36.50 56.68
2000M06 647.12 39.00 35.00 52.11
2000M07 619.81 43.00 39.00 49.88
2000M08 621.61 44.00 40.00 56.56
2000M09 625.88 45.50 41.50 52.08
2000M10 642.12 48.20 44.20 53.60
2000M11 632.24 40.80 36.80 50.07
2000M12 543.33 43.50 39.50 57.74
2001M01 503.09 45.00 51.00 57.89

2001M02 250.94 44.70 46.50 52.92
2001M03 600.95 34.50 52.50 48.69
2001M04 577.43 39.20 35.20 45.99
2001M05 566.27 38.00 34.00 44.97
2001M06 550.24 36.80 32.80 40.40
2001M07 542.08 37.50 33.50 42.15
2001M08 495.37 35.10 31.10 40.50
2001M09 491.32 30.00 26.00 39.75
2001M10 499.69 27.90 41.00 39.01
2001M11 486.11 32.60 27.00 32.89
2001M12 554.93 23.20 22.75 31.65
2002M01 435.28 29.80 27.50 34.72
2002M02 393.92 29.50 29.00 35.35
2002M03 383.96 28.80 29.00 33.42
2002M04 392.38 30.00 28.50 33.69
2002M05 388.10 32.00 30.50 35.51
2002M06 389.35 32.00 34.00 40.36

2002M07 382.09 37.50 42.50 41.80
2002M08 404.00 46.00 65.50 49.00
2002M09 433.16 35.10 61.00 45.50
2002M10 457.20 48.00 49.50 47.01
2002M11 478.26 52.00 50.50 52.73
2002M12 429.08 62.70 56.00 62.40
2003M01 629.28 70.50 66.50 68.17
2003M02 428.50 69.70 69.50 71.72
2003M03 612.90 75.00 73.00 69.23
2003M04 571.96 80.10 81.00 74.03
2003M05 668.86 82.30 79.00 76.52
2003M06 709.62 83.60 82.00 75.49
2003M07 700.02 79.30 79.50 71.54
2003M08 683.21 71.00 77.50 61.25
2003M09 657.90 64.50 74.50 59.00
2003M10 640.36 44.60 46.00 51.26
2003M11 647.17 59.20 56.50 62.23

2003M12 635.16 64.80 60.50 74.10
2004M01 758.97 64.60 59.50 75.05
2004M02 711.27 67.40 60.50 88.61
2004M03 742.07 69.00 64.00 88.53
2004M04 854.36 62.80 62.00 86.00
2004M05 832.01 68.90 62.50 85.25
2004M06 859.94 65.70 63.00 82.72
2004M07 821.42 63.00 64.00 77.17
2004M08 858.58 71.50 71.50 83.45
2004M09 851.44 66.30 69.00 95.00
2004M10 493.82 69.00 56.00 90.21
2004M11 894.44 75.00 73.50 88.04
2004M12 890.57 75.80 90.00 83.16
2005M01 868.39 70.00 68.00 79.63
2005M02 824.54 70.50 69.00 77.66
2005M03 584.65 66.60 69.00 72.24
2005M04 718.48 62.50 68.00 70.08

2005M05 562.07 59.50 69.00 62.96
2005M06 514.08 56.50 62.00 57.70
2005M07 716.96 53.50 61.50 57.00
2005M08 714.63 55.00 62.50 40.00
2005M09 720.37 NA 58.00 56.40
2005M10 644.84 42.50 42.00 56.35
2005M11 751.57 47.60 44.00 56.64
2005M12 806.26 47.50 41.50 58.72
2006M01 657.98 46.30 42.50 58.57
2006M02 611.59 44.40 44.00 57.10
2006M03 611.05 49.90 47.00 59.87
2006M04 547.90 52.30 49.50 74.78
2006M05 518.20 50.40 48.00 61.80
2006M06 611.57 47.80 47.00 61.65
2006M07 664.74 50.40 51.50 62.50
2006M08 360.10 53.80 51.00 55.50
2006M09 760.60 47.50 48.50 45.00

2006M10 831.95 42.00 43.50 50.10
2006M11 753.00 41.00 39.50 49.27
2006M12 583.38 42.20 42.50 53.99
2007M01 437.83 51.30 51.50 61.54
2007M02 555.38 56.50 53.50 62.91
2007M03 472.64 56.10 54.50 65.78
2007M04 783.84 60.60 60.00 72.77
2007M05 546.25 62.60 64.50 76.07
2007M06 895.45 64.80 67.50 73.79
2007M07 795.68 65.00 69.00 75.60
2007M08 1141.92 65.00 77.00 80.00
2007M09 987.79 NA 72.00 77.00
2007M10 987.79 57.50 67.00 77.56
2007M11 875.80 71.00 69.50 86.76
2007M12 1016.40 88.50 88.00 110.51
2008M01 1363.38 91.10 91.00 117.23
2008M02 1220.62 112.00 111.50 137.90

2008M03 1178.16 151.00 125.00 173.50
2008M04 1276.00 168.00 147.50 184.77
2008M05 1345.35 138.80 140.00 164.00
2008M06 1687.11 111.30 110.00 151.00
2008M07 1390.48 113.00 120.00 160.00
2008M08 1619.44 NA 122.50 NA
2008M09 1832.73 NA 90.00 136.00
2008M10 1867.72 100.00 102.00 108.75
2008M11 2521.47 116.50 122.50 122.49
2008M12 1725.32 142.00 125.00 118.95
2009M01 1637.54 106.50 116.00 111.68
2009M02 1274.71 98.00 97.50 113.05
2009M03 1091.34 102.50 107.50 120.96
2009M04 1138.06 104.00 96.00 122.35
2009M05 1099.67 97.50 107.50 129.69
2009M06 1132.08 106.00 105.00 NA
2009M07 1135.27 89.00 102.50 NA

2009M08 1199.50 NA 93.50 NA
2009M09 1165.91 NA 99.00 NA
2009M10 1070.10 99.50 107.00 128.00
2009M11 1098.38 112.00 105.00 130.49
2009M12 1085.88 116.50 111.00 134.25
Source: Sudan Customs authority, Gadarif , El Obeid, and Om Rwaba Crop
Markets Administration, Gadarif and North Kordofan States (2009).
NA = not available

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The Economics of Sesame Production and Marketing

in Gadarif and North Kordofan Rainfed Sector -

Hala Yousif Ahmed Abu Adel

A thesis presented to University of Khartoum for

Supervisor : Ali Abdel Aziz Salih

Department of Agricultural Economics

To my dear mother, father

‫ﺍﻟﺴﻤﺴﻡ ﻓﻰ ﻭﻻﻴﺘﻰ ﺍﻟﻘﻀﺎﺭﻑ ﻭﺸﻤﺎل ﻜﺭﺩﻓﺎﻥ)ﺍﻟﺴﻭﺩﺍﻥ( ‪ .‬ﺍﺨﺘﺒﺭﺕ ﺍﻟﺩﺭﺍﺴﺔ ﺍﻟﻔـﺭﻭﺽ ﺍﻻﻴﺠﺎﺒﻴـﺔ‬

‫ﻟﻠﺨﺼﺎﺌﺹ ﺍﻻﺠﺘﻤﺎﻋﻴﺔ‪-‬ﺍﻻﻗﺘﺼﺎﺩﻴﺔ ﻟﻠﻤﺯﺍﺭﻋﻴﻥ ﻭﺍﻟﺘﺠﺎﺭ‪ ،‬ﺘﻜﺎﻟﻴﻑ ﺍﻟﺤﺼﺎﺩ ﺍﻟﻌﺎﻟﻴﺔ ﻭﺍﻟﻔﺎﻗﺩ ﻤﻥ ﺍﻟﻐﺭﺒﻠﺔ‬

‫ﻭﻟﺘﺄﻜﻴﺩ ﺠﻭﺩﺓ ﺇﻨﺘﺎﺝ ﺍﻟﺴﻤﺴﻡ ﻟﺯﻴﺎﺩﺓ ﺼﺎﺩﺭ ﺍﻟﻤﺤﺼﻭل ﻤﻥ ﺍﻟﺴﻭﺩﺍﻥ‪.‬‬

Abstract English Iii

List of contents Vii

List of table Xiii

List of figure Xvii

1.1. Importance of Sesame production in the world and Sudan 1

1.2. Importance of sesame exports in the world and Sudan 5

1.3. Problem statement 10

1.4. The objectives of the Study 11

1.5. Hypotheses to be tested 12

1.6. Data Collection 12

1.7. Methods of analysis 13

CHAPTER TOW: Literature review 15

2.1. Marketing channel 15

2.1.1. Distribution channel 15

2.1.2. The role of marketing channel 15

2.1.4. Marketing margins 16

2.1.5. Marketing net margin 16

2.5.6. Gross margin 17

2.2. Market Structure 18

2.3. Briefs on the crop markets of Gadarif, El Obeid and Om Rwaba: 23

2.3.1. Gadarif market 23

2.3.2. El Obeid Market 24

2.3.3. Om Rwaba Market 26

2.4. Market Distortion (Policy Analysis Matrix) 27

2.5. Market Co-integration 29

CHAPTER THREE : Methodology 33

3.1. Method of data collection 33

3.2. Method of data analysis 34

3.2.1. Budget analysis method 34

3.2.1.1. Gross revenue of production 34

3.2.2. Market Structure 35

3.2.2.1. The elements of market structure are 36

3.2.2.2. Definition of competitive and HHI 37

3.2.3. Policy Analysis Matrix (PAM) Method 38

3.2.3.1. The financial (private) profitability 40

3.2.3.2. Measure of economic incentives 41

3.2.3.3. Measure of comparative advantage 42

3.2.3.5. Calculation of the export parity prices 44

3.2.3.6. Calculation of the import parity prices 45

3.2.4. Temporal and spatial analysis 47

3.2.5. Spatial price analysis method 47

3.2.5.1. Stationarity and unit root test 47

3.2.5.1.1. Definition of non stationary 47

3.2.5.1.2. Testing for stationary 49

3.2.5.2.1. Johansen co-integration test 53

CHPTOR FOUR : Socioeconomics Characteristics 56

4.1. Age of the respondents 56

4.4. Martial status 65