Somalia : a study of the profitability of Somali exports

Section 2 presents an overview of Somalia"s export sector and the major commodities involved. Particular emphasis is given to the effect of recent subsectoral developments on export performance. Section 3 provides a detailed discussion of cost composition to point of export for each commodity/commodity group. Included are tables which summarize cost for each stage of the marketing chain. Section 4 reviews specific export markets (Saudi Arabia, North Yemen, Egypt, and Italy) to establish actual prices realized for commodities (instead of minimum export prices) and assess issues surrounding Somalia"s entry into each market. Finally, the results of the profitability analysis are detailed in Section 5. The implications of the analysis for exchange rate policy are discussed, as are the linkages between exchange rate adjustment and export performance. Recommendations for ensuring the continuation of data collection and analysis are included. A major conclusion is that increased export profitability helps only the seller in the willing buyer/willing seller trade equation. Moreover, a number of non-price issues constrain the effective entry of Somali commodities into foreign markets. Exchange rate adjustment is thus a necessary but not sufficient condition for enhancing export performance.