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Alba Iulia
Wednesday, August 12, 2020

Low, unsustainable maize prices threaten next year’s output

Economy Low, unsustainable maize prices threaten next year's output

Zambia’s maize harvest for the 2010/11 marketing season is likely to fall from output of more than 1.9 million tonnes expected this year because of low, unsustainable maize prices, an industry official said on Monday.

Zambia National Farmers’ Union (ZNFU) President Jervis Zimba said the maize price had dropped from about $285 per tonne at the end of March to $249 per tonne as of May 11 after Zambia’s Food Reserve Agency (FRA) offloaded maize onto the market to keep prices low.

Zimba said farmers were failing to find a market for their irrigated maize which required huge investment in drying facilities as it was normally harvested between March and April with very high moisture content.

“The future of both early maize production and rain-fed maize production hangs in the balance,” Zimba said in a statement.

Zimba said production costs were rising owing to a hike in fuel prices and a planned increase in electricity tariffs.

Maintaining the price of maize below the cost of production would hurt future production, he said.

“Should this situation remain (unchanged), maize production will drop drastically next farming season and the country risks having to return to importing maize,” Zimba said.

He said there was a need to adequately fund the FRA so that it could participate more effectively in the market in buying excess crop which was depressing the price of maize.

Zambia plans to export between 50,000-80,000 tonnes of maize this year but Zimba urged the immediate export of up to 178,000 tonnes of 2009 carry-over stocks to ensure better local prices for this season’s crop.

Finance Minister Situmbeko Musokotwane told Reuters the government was presently not in a position to allocate additional resources to the FRA but may do that next year.

Musokotwane said the government would consider additional maize exports to protect the local grain industry.

[Reuters]

7 COMMENTS

  1. We need to help our farmers against such unforeseen losses. In my my view the starting point should be some financial innovations in the market. Let the farmers take up derivatives to protect against volatility in grain prices. Our farmers need better than what is obtaining now especiall when agric. is an altenative to our economy.

  2. Farmers should explore innovative ways of selling their surplus Maize. One innovative venture is Warehouse Stock Receipting where Farmers deposit their Maize and use it for collaterization purposes. The System has worked in other Countries and can work in Zambia also.

  3. Derivatives underpin the current global financial apocalypse; no, they are not the answer to our woes. Job creation and fair wages drive consumption. A country whose citizenry survive on four meals per week has little use for bumper harvests. Soon we will be back to the bad old UNIP days of queuing for roller meal and Tip Top.

  4. South Africa has this morning announced a maize surplus of 4.5 million tons and there are fears there too that the prices will fall. This is not only a problem for Zambian farmers but looks like the farmer with the most imaginative marketing that will involve value addition will benefit the most. Just as GRZ has dropped fuel subsidies, I don’t think its clever for them to encourage further subsidies to farmers.

  5. awe mwe their is always a problem in zambia be it fuel food awe when do these problems end we are tired ahhhhhhhhhhhh~X(~X(~X(~X(

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