The Impact of Overvalued Exchange Rate Policy on Agricultural Trade in Sudan

Abstract: 
Since political situation has indicated that South Sudan would separate from the Sudan and the expectations of the country to lose its major source of foreign exchange from oil exports, the exchange rate of the Sudanese pound has deteriorated sharply. The main objectives of the study were to assess the responses of some economic variables (supply and demand) of agricultural commodities to exchange rate overvaluation policy adopted by the Central Bank of Sudan and their consequences on agricultural trade of the country. A multi-market model used as a main tool to assess the macro policy impact on the agricultural crop markets of the Sudan. The study results demonstrated that the overvalued exchange rate has a negative effect on the Sudanese agriculture trade sector, however, the expected more overvaluation of the currency entails more decrease in producer and consumer prices and, hence, a general decrease in agriculture exports as a result of the joint effect of decreasing supply and increasing demand. On one stream, the supplies of all crops show various levels of decrease under the overvaluation scenarios. On the other, all consumers markets tend to have an increasing demand because of the overvalued low consumer prices which will enhance consumer’s accessibility to food markets
se séparera du Soudan et les attentes du pays à perdre sa principale source de devises à partir des exportations de pétrole, le taux de change de la livre soudanaise s’est nettement dégradé. Les principaux objectifs de l’étude étaient d’évaluer les réponses de certaines variables économiques (offre et demande) de produits agricoles à la politique de surévaluation du taux d’échange adopté par la Banque Centrale du Soudan et leurs conséquences sur le commerce agricole du pays. Un modèle multi-marché est utilisé comme un outil principal pour évaluer l’impact des macro-politiques sur les marchés desdémontré que le taux de change surévalué a un effet négatif sur le secteur soudanais de commerce des produits agricoles. Cependant, la surévaluation plus attendue de la monnaie entraîne plus de baisse des prix de production et de consommation et, par conséquent, une baisse générale des exportations de produits agricoles comme un résultat de l’effet conjoint de la diminution de l’offre et de l’augmentation de la demande. D’une part, les fournitures de toutes les cultures montrent différents niveaux de la diminution en vertu des scénarios de surévaluation. D’autre part, tous les marchés de consommation ont tendance à avoir une demande croissante en raison des prix surévalués de consommation faible qui permettront d’améliorer l’accessibilité des consommateurs aux marchés alimentaires.
Language: 
Extended abstracts submitted under Agricultural Marketing and Trade
Date of publication: 
2012
Country: 
Region Focus: 
North Africa
Author/Editor(s): 
Collection: 
RUFORUM Conferences and Workshops
Agris Subject Categories: 
Licence conditions: 
Open Access
Access restriction: 
Form: 
Printed resource
ISSN: 
E_ISSN: 
Edition: 
Notes: 

 
The 2012 RUFORUM Biennial Conference is the third in the series. The main objective of the Biennial conferences is to provide a platform for agricultural research for development stakeholders in Africa and beyond to actively exchange findings and experiences, while at the same time learning lessons towards improving performance of the agricultural sector and ultimately people’s livelihoods. The biennial conference is RUFORUM’s most comprehensive meeting for the diversity of stakeholders in agriculture. It is especially dedicated to graduate students and their supervisors, grantees in RUFORUM member universities and alumni. It is a platform for peer review, quality control, mentorship, networking and shared learning. The third Biennial Conference was attended by 657 participants. This record contains an extended abstract accepted under the theme Agricultural Marketing and Trade