Statistical modelling of green coffee price in some selected East African countries using panel data

Abstract

Coffee is a critical agricultural commodity in East African countries, significantly con tributing to their economies by generating foreign exchange, creating employment op portunities and supporting the livelihoods of millions of smallholder farmers.Despite its importance, the region’s coffee sector faces numerous challenges, including fluctu ating international prices, climate change impacts, limited access to quality inputs, policy and trade barriers, and economic instability. While various researchers have explored aspects of coffee price in East Africa, there has been no comprehensive study utilizing panel data to analyze these dynamics across multiple countries over an ex tended period. This study addresses this gap by developing a statistical model to analyze the evolution of coffee price in East African countries from 1996 to 2022. Data were collected from FAOSTAT and the World Bank, and a panel data analy sis model was employed. The findings reveal that regional trade agreements play a vital role in enhancing coffee price and trading in the region. Additionally, factors such as exchange rates, fertilizers, inflation rates, agricultural land, and foreign di rect investment are significant determinants of coffee price. The study also identifies that agricultural employment and inflation are currently under performing relative to their potential contribution to the global market, indicating substantial room for improvement. The objectives of this research are to identify key determinants of cof fee price ,To evaluate the economic implications of green coffee price in East Africa using panel data analysis techniques and provide actionable policy recommendations. The insights gained from this study aim to inform policymakers and stakeholders in developing strategies to promote sustainable coffee price, enhance economic stability, and improve the livelihoods of coffee farmers in East Africa