1. Impact of climate change and international price uncertainty on the Sudanese sorghum market: a stochastic approach
Maria Sassi
Department of Economics and Management
University of Pavia - Italy

2. Objective of the analysis
Possible sorghum price changes and likely probability of occurrence
Different rainfall scenarios
Price uncertainty on international markets

3. Importance of the analysis
Rainfall
Sudanese agriculture
Rainfall supports the
overwhelming majority of Sudanese
agricultural activities: 95% rain fed sector

4. Importance of the analysis
Rainfall
Sudanese agriculture
Rainfall supports the
overwhelming majority of Sudanese
agricultural activities: 95% rain fed sector
- 93% of non-oil export revenues;
80% of labour force in rural areas.

5. Importance of the analysis
Rainfall
Sudanese agriculture
Rainfall supports the
overwhelming majority of Sudanese
agricultural activities: 95% rain fed sector
70% of domestic cereal production;
the core of the country’s food security issue.
- 93% of non-oil export revenues;
80% of labour force in rural areas.

6. Importance of the analysis
- Frequent extreme good or bed years;
Concentrated in 4 months;
The driest and the most at risk country in Africa.
Rainfall
Sudanese agriculture
Rainfall supports the
overwhelming majority of Sudanese
agricultural activities: 95% rain fed sector
70% of domestic cereal production;
the core of the country’s food security issue.
- 93% of non-oil export revenues;
80% of labour force in rural areas.

7. Importance of the analysis
One of the major staple food
Sudanese agriculture
Sorghum
Predominantly produced in rain-fed farming systems
Quantities depend on rainy season and determine the marketed surplus
Domestic prices
International market prices
40% ( )

8. High levle of uncertainty
Objective of the analysis
Possible sorghum price changes and likely probability of occurrence
Different rainfall scenarios
Price uncertainty on international markets
High levle of uncertainty

9. High level of uncertainty
Objective of the analysis
Possible sorghum price changes and likely probability of occurrence
Different rainfall scenarios
Price uncertainty on international markets
Stochastic model
High level of uncertainty

10. Value added of the analysis
Contribution to:
- Climate change, agriculture and food security
- Climate change and markets
- Price transmission
Combination of two stochastic variables,
overcoming the traditional time-series or panel data studies,
two markets in the same country (confounding ommitted variables)

11. Two markets: markets work as auction for free trade sorghum that is not allowed from being traded outside auction fences
Most important
and best organised
Obeid
Different degree of vulnerability
to climate change
Gedaref
Kordofan: acute vulnerability to extreme climate changes
Gedaref: surplus producing area

12. Probability distribution
The stochastic method
Parametric model
Probability distribution
input variables
Stochastic model 1
Model prediction X

13. The parametric model Annual changes Monthly production of sorghum
Monthly rainfall (mm)
Monthly wholesale sorghum price (mk. incentive)
Annual changes

14. The parametric model Annual changes Monthly production of sorghum
Monthly rainfall (mm)
Monthly wholesale sorghum price (mk. incentive)
Annual changes
Monthly domestic price of sorghum
Monthly international price of sorghum
Annual changes

15. The parametric model Monthly production of sorghum
Monthly rainfall (mm)
Monthly wholesale sorghum price (mk. incentive)
Monthly domestic price of sorghum
Monthly international price of sorghum

16. The parametric model Time period 2002-2010
Monthly production of sorghum
Monthly rainfall (mm)
Monthly wholesale sorghum price (mk. incentive)
Time period
Monthly domestic price of sorghum
Monthly international price of sorghum

17. The parametric model estimate

19. The stochastic variables
RiskLogistic PDF
RiskTriangular PDF

20. The stochastic models
Model 1
Model 2
Model 3

22. the dry and wet scenario
The stochastic model:
the dry and wet scenario
Model 1
Model 3
defined considering the projections made in the occasion of the Sudan’s First National Communication to the UNFCCC and equal to a decrease of about 5 percent per month during the rainy season by 2060.

23. *Upper delimiter defined setting the lower delimiter equal to 0

24. From an agricultural to a market perspective
Conclusions (1)
Rainfall
Sorghum price
Different explanatory
capacity according to
Agricultural system
Ecosystem
Specific focus on
agricultural sector and
its production factors
Government of Sudan:
ecological approach
to climate change
From an agricultural to a market perspective

25. Conclusions (2) From an agricultural to a market perspective
Domestic and
international price
From supply side
policies to a coordination of policies
Sorghum and
food security
Water management
and R&D irrigation
Wet scenario
Expantion of irrigated
farming system