5.3.3 Price changes of processed versus unprocessed maize in Lusaka, Zambia
Observed price pattern:
Various prices of processed maize in Lusaka 
Market
35,000.00
30,000.00
25,000.00
20,000.00
Price
15,000.00
10,000.00
5,000.00
0.00
1993/6 1993/10 1994/2 1994/6 1994/10 1995/2 1995/6 1995/10 1996/2 1996/6 1996/10 1997/2
Month
BREAKFAST MEAL 25 KG
MAIZE DRY 90 KG
ROLLER MILL 25 KG
The price behavior observed in the Lusaka market for these products was interesting for the
following reasons.  First, there is a difference in the variability between processed (lower)
and unprocessed (higher) maize.  Second, the margin between the two forms of processed
maize meal remained relatively constant.  All of the commodities seem to incorporate
inflation.  The objective of understanding this situation is to make sense out of these
relationships.
Steps taken to investigate the price behavior
:
The first step in understanding this graph is to understand the production and consumption
patterns.  Obviously a city like Lusaka is not a surplus area.  Still, the production areas
around Lusaka are surplus producing areas in normal production years.  The maize grain
availability in the Lusaka market depends on the amount of maize produced in the country,
and specifically in the areas surrounding Lusaka.  The production, and therefore price, of
maize is dependent on the weather, which results in high variability of production from year
to year.  This variability is reflected in maize prices.  For example, the 1994/95 agricultural
season was below average, which explains the relatively high price peak compared to the
other two seasons.  The less dramatic price changes for the processed maize can be
explained by the smoothing effect of imports and the slow, steady release of maize meal on
the market by millers.  In the case of all three commodities there is a steady inflationary
effect on prices.
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