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This paper examines intraregional bilateral trade in virtual water embedded in cereal flows between the Southern Africa Development Community (SADC) states. A gravity model is employed to examine whether annual bilateral trade depends on differences in water endowments, but also includes socio-economic and political determinants that affect trade. There is evidence that the abundance of water resources in a country influences trade for a product that is water dependent. Thus, the adverse effect of water scarcity in a country may be ameliorated by encouraging exports of water-intensive cereal crops where water is in abundance and imported where water is scarce.

Does bilateral trade in cereals within SADC reflect virtual trade in water between countries with different water endowments?