PICS or poly sack: Traders’ willingness to invest in storage protection technologies

Abstract

This study applies a simple financial model to compare the profitability of selected grain storage protection technologies (PICS and Poly sacks) in Ghana. To address the objectives, market survey data of soybean traders who represent a section of the soybean supply chain was used. Per the model, the price seasonality for profitable soybean storage was estimated by accounting for costs related to storage (protectants, maintenance, supervision, and labor), the opportunity cost of capital, and storage technologies (PICS and Poly sacks). Results indicated that the profitability associated with poly sacks was higher than the PICS bags over the entire support of seasonal harvest prices and consistent across the different trader types. Secondly, less than 20% of the traders were willing to invest in storage protection technologies since the value of their storage losses is higher than the value of the investment cost.