Does bilateral trade in cereals within SADC reflect virtual trade in water between countries with different water endowments?

Abstract

ABSTRACTThis paper examines intraregional bilateral trade in virtual water embedded in cereal flows between the Southern Africa Development Community (SADC) states. A gravity model is employed to examine whether annual bilateral trade depends on differences in water endowments, but also includes socio-economic and political determinants that affect trade. There is evidence that the abundance of water resources in a country influences trade for a product that is water dependent. Thus, the adverse effect of water scarcity in a country may be ameliorated by encouraging exports of water-intensive cereal crops where water is in abundance and imported where water is scarce.KEYWORDS: bilateral trade in cerealswater endowmentsvirtual water tradegravity modelSouthern Africa Development Community (SADC) AcknowledgementsWe are grateful to the International Water Management Institute, the IFPRI, AKADEMIYA2063, the Bill and Melinda Gates Foundation, and the United States Agency for International Development for their support for the ReSAKSS programme, one of whose activities led to this paper. The views in this paper are those of the authors’ and do not represent the views of the institutions mentioned above.Disclosure statementNo potential conflict of interest was reported by the authors.Data availabilityThe data used in this analysis are from UN COMTRADE (https://comtrade.un.org/), UN FAO aquastat data (https://www.fao.org/aquastat/en/), the World Bank’s Development Indicators (http://datatopics.worldbank.org/world-development-indicators/) and UN FAO production database (https://www.fao.org/faostat/en/#data/QCL).Notes1. SADC member states include Angola, Botswana, Comoros, Democratic Republic of Congo (DRC), Lesotho, Malawi, Madagascar, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Eswatini, Tanzania, Zambia and Zimbabwe. For the analysis, only the Comoros, DRC, Seychelles and Angola were excluded.Additional informationFundingThis research is not associated with any specific funding.