The Fiji Islands economy is widely held to be constrained by a lack of market and transport
infrastructure. Such infrastructure problems can reduce the efficiency of markets and result in
wider than optimal disparities in food prices, both between markets and over time. In this paper
we use monthly price data for 22 locally produced crops from Fiji’s major municipal markets, for
the period 2001-2006, to identify the extent of the spatial pricing efficiency between these
markets. Short-run price responses are estimated through SURECM. Relative price movements
between markets indicate the potential for profitable arbitrage which will maximise the economic
value of food to the Fijian economy. The arbitrageurs might be middlemen or individual farmers
shifting their own produce between selling centres. We find that the municipal markets are
generally spatially price efficient in the technical sense that prices return to their long-run
relationships after a shock. But after a disturbance prices generally still take some two months
to return to their equilibrium with the reference market, the capital Suva. This suggests there is
scope for policy action to improve the spatial pricing efficiency of Fiji’s food markets. An
enhanced market price reporting system is one option that deserves consideration.