Analyzing the Determinants of Maize Price Inflation: A Case Study of the Maize Commodity by Milling Companies in Lusaka

Maize price inflation remains a persistent challenge in Zambia, affecting food security and the livelihoods of millions. As a staple food, maize is a critical component of the Zambian diet, and its price fluctuations have far-reaching implications for the economy, poverty levels, and human well-being. This study investigates the determinants of maize price inflation in Lusaka, Zambia, focusing on the maize commodity by milling companies. Using mixed-methods approach combining quantitative and qualitative data, this research examines the relationship between maize price inflation and three key determinants: Price floors, input costs and transportation costs. This study employs multiple linear regression analysis to quantify the impact of these determinants on maize price inflation. The findings of this study reveal that transportation costs have a significant impact on maize price inflation, accounting for 59.83% of the variation in maize prices. This is consistent with the fact that Zambia is a landlocked country, relying heavily on transportation networks to move maize from production areas to consumption centers. The study also finds that price floors explain 73.8% of the variation in average maize prices. The input costs contribute to maize price increases explain 62.33% of the variation in maize price inflation, meaning there’s a positive impact of input costs on maize price. The implication of these findings are far-reaching. Policymakers, milling companies, and other stakeholders seeking to stabilize maize prices and ensure food security in Zambia must prioritize interventions that address transportation costs such as investing in transportation infrastructure, improving logistics, and promoting competition in the transportation sector. Additionally policymakers should review the price floor mechanism to ensure it balances the interest of farmers, millers and consumers. The study contributes to the existing literature on maize price inflation by providing new insights into the determinants of maize price inflation in Zambia. The findings of this study have important implications for policymakers, businesses and civil society organizations seeking to promote food security, reduce poverty and improve human well-being in Zambia.