Bumper maize harvest in the region spells doom for Zambia
By Jeff Kapembwa
Lusaka – Zambia, a major maize producer in southern Africa, faces a shrinking market prospect for its commodity as most countries in the region are projected to receive bumper harvests spurred by good rainfall in the 2016/17 season, experts have predicted.
Preliminary harvest projections for Southern Africa for 2017 show that Zambia may emerge as one of the countries in the region, besides South Africa, Malawi and Zimbabwe, with huge stocks of maize.
This according to experts, might force Zambia to reduce the current selling price for maize of US$240 a tonne by about 30 percent or more because of the improved harvests in most of its neighbouring countries that earlier relied on it for food.
The Centre for Trade and Policy Development (CTPD), and
Zambia Market Commodities Exchange (ZAMACE), among other players, warn that if this happens there could be a drop in the demand for products like maize by the neighbours, hence this will affect the selling price and further affect the small scale farmers and other players involved in the export of the commodity.
CTPD acting executive director Isaac Mwaipopo predicts that the country expects the maize harvest to rise by 36 percent to 3.2 million tonnes this season from 2.4 million tonnes harvested last season.
The 2017/18 marketing season could ultimately affect many of the maize traders that look to the regional markets for good value from the crop.
“We’ll see a situation where there will be a drop in demand on Zambia’s maize as the countries that have been consuming the maize from here might not need us, especially that we have been demanding slightly above US$240/tonne and this could ultimately affect the participation of various players, especially the private sector because of the depressed market,” Mwaipopo said.
On domestic consumption and crop output, Zambia consumes an average two million tonnes of maize a year for both human and industrial use.
In the 2016 marketing season, Zambia’s maize output stood at 2,873,052 tonnes, an increase of 10 percent from that of 2015 season.
Now with the stock premised to reach 3.5 million tonnes, Mwaipopo said this presents a logistical challenge to the country.
“This will create serious problems as the country will have a challenge to store this amount of grain and as CTPD, we consider the 2016/ 17 marketing year as a lost opportunity for small-scale farmers and export grain traders to cash in because Zambia had closed its borders on the exportation of maize.
“The failure by Zambia to take advantage of the demand that existed for maize has made Zambia lose out on potential revenue that would have otherwise propelled the country’s domestic revenue mobilisation agenda forward,” he said.
As preparations for the 2017/2018 marketing year gets underway, Mwaipopo appealed to government to consider lifting the ban on the export of maize and mealie meal that has been in effect since October last year without further delay.
Lifting the maize export embargo, the CTPD official said, would assist in avoiding potential post-harvest loses especially with the limited storage space in the country.
The government has further been urged to consider creating incentives to help attract investments in the construction of modern storage facilities.
Local millers argues that with Zambia still sitting on an excess 600,000 tonnes of the maize as carryover stocks from the 2016 season and in the hands of the Food Reserve Agency, the informal and formal grain traders and the Zambia National Farmers Union (ZNFU), this could further affect the stocking space and may further affect many of the farmers who are yearning to hold on to what was either produced or bought during the previous marketing season awaiting for an increase in the prices on the regional market.
According to a recent SADC quarterly food security update, the maize output and the regional food security situation for 2017/18 marketing year was expected to improve in several countries.
South Africa, Malawi and Zimbabwe are among other countries that had been starved of enough stocks in the past because of drought and flooding, but the good rains in the 2016/17 season mean they might shun maize from Zambia, which has been the major supplier.
South Africa’s maize output, which normally averaged slightly above 40 percent of maize production in the region, is forecast to increase by 80 percent from an average 8 million tonnes produced last season to 14 million tonnes this season.
Malawi, one of the countries that suffered shortages because of floods and other climatic challenges, indicated in its latest agriculture production an increase of about 20 percent from what was produced last season.
Zimbabwe, which consumes nearly 2 million tonnes of maize annually, is also expecting a bumper harvest of close to 3 million tonnes this year thanks to the good rains.
ZAMACE, Zambia’s sole agricultural commodity exchange, stressed that with the situation in most SADC countries indicating an improved harvest, against a depressed agricultural market, Zambia could consider holding on to what will be harvested this season as well as the carryover stocks from 2016 on various crops including soya beans, maize, among other crops.
This will assist the country to avoid experiencing a dry marketing season to its traditional food buyers in the region, including Zimbabwe, the ZAMACE argued.
This situation might ultimately compel the country to ultimately reduce its selling price of maize to US$220/tonne or less to create space in storage sheds.