This week’s analysis stems from last week’s post were we analyzed crop production and rice cultivation, where we found an interesting outcome relating to cassava being a relatively high-income crop, yet not commonly grown (less then 5% of farmers reported growing it). As promised, we dive deeper into the IHS dataset to get a better understanding of cassava cultivation thus suggesting answers to some of the questions posed last week. In addition to today’s post being related to last week, we are also considering trying out this type of post, where we show arbitrage opportunities for those interested in taking advantage of price differentials for a commodity between regions. Let us know if you would like more of this kind of analysis.
To start with, we investigate how the price of cassava varies across months. Figure 1 below is a dot graph of price of cassava across the twelve months. From the figure, we can observe that cassava is generally more expensive from December to May with it been most expensive in March, with prices shooting up to around D20 per bunch (“sam”). It is relatively cheaper around June to November; however, it is cheapest in August which stands at around D14. The high prices especially towards May can be as a result of stock of cassava form the previous season getting depleted during these periods. Similarly like any other industry, there is a possibility of new investors which requires preparing through the purchase of its parts thus pushing the price up. Because cassava is recommended as a highly compatible intercrop, due to its water retention capacity and weed control, it is mostly used by farmers for intercropping option.
Figure 1: Average Price of Cassava, National, across the year
Let us now investigate the price of cassava across the year in the different LGAs represented in Figure 2. At first glance the figure looks complicated but is fairly straight forward. Each dot on the plot corresponds to a price level for a give month for each of the seven LGAs. This implies that there are seven different prices in each month and each of these prices corresponds to an LGA.
At first sight, you will notice there is less deviation in price across months in Kerewan, Janjanbureh and Basse with cassava being cheaper in Kerewan D10 than any other LGA. Cassava happens to be more expensive in Basse than any other LGA with relatively stable at around D25 across the whole year. It can also be justified to say that prices in Banjul and Kanifing do not carry any difference however, residents of these two LGAs can purchase cassava cheaper between June and August in which it is cheapest with price around D13. It is expense to purchase cassava around these two LGAs from January to May and December as prices rise to around D25. Prices in Brikama are relatively stable and cheaper from June to November whilst expensive from December to March and May with estimates around D15 and D25 respectively. Prices in Kuntaur area relatively cheaper at around April to October (D10) with a little spike at around March (around D17.5). It makes sense for prices to be high in these areas factoring both transportation as well as storage costs especially for Banjul and Kanifing were farming is not a predominant activity.
We have not had a chance to look at the total amount of cassava produced in each LGA, but we believe that the challenge in transporting cassava across the country as well and the lack of proper storage facilities means that the prices we observe reflect the amount of cassava produced in that LGA.
Figure 2: Price of Cassava, across the year by LGA
In summary, we’ve learnt that at the national level, cassava is relatively cheaper during the periods June to November, although there is significant variation in process across LGAs. We have seen that cassava is cheapest in Kerewan thus for those interested in venturing into arbitrage (buying from a low-price market and selling to a high price market), Kerewan and Janjanbureh are the best places to make your purchases. For those purchasing their goods in Kerewan, Kanifing and Banjul are great places to sell during the months December to May and Basse for the remaining months. For those purchasing their cassava in Janjanbureh, Basse is the best alternative all year round due to the LGAs’ proximity and Basse’s constant high prices.