A new report by US backed Famine Early Warning Systems Network says Maize prices are expected to decline as the new harvest increases market supply and as rural households access more food from own production and labor.
The report released today says the lower prices will benefit market-dependent households, though prices are expected to remain above the five-year average, due to increases in fuel costs.
It noted that Zambia’s export potential for its record harvest may be limited, as good production elsewhere in the region has reduced demand and provided abundant regional supply.
The report however observed that informal maize flow into Tanzania has started increasing as demand from Tanzanian traders picks up, and increasing demand from Zimbabwe is expected later in the season.
It added that acute food insecurity remains minimal as the new harvest increases household food stocks and variety in the rural areas and starts to reach the market.
Zambia’s Maize production for the 2013/2014 agricultural season reached a record 3.3 million Metric tons, resulting in a large surplus of 1.15 million Metric tons.
“Farmers have harvested their crops and are busy preparing for the market, while some crops are already on the market. Maize sales by small scale farmers has commenced and the fact that farmers are transporting the grain to markets and milling companies is an indication of large supply as they compete for the market. Demand for labor is generally good, and poorer households in the rural areas are mostly working for the better-off in order to increase access to food,” the report noted.
It observed that small traders in Lusaka have started stocking up maize which they are buying from farmers bringing to the main market from mostly Central, Southern and Eastern Provinces with the intention of later selling to large traders, millers and other processors.
“The maize which had been selling at 60 ZMW/50 kg in May has since dropped by 8 percent to 55 ZMW/50kg in June (the current wholesale market price). Maize in Eastern Province is also selling at or near 55 ZMW/50kg. Generally, maize grain prices are on the decline to the advantage of market-dependent households, as expected given the large harvest, with most rural households taking advantage of their harvests for own consumption.”
It however noted that maize grain prices are at least 40% above the five year average.
“Despite recent maize grain price decreases, maize meal prices are still high and mostly remained stable in May and June with respect to April and on average 42 percent above the five-year average as millers run down their old stock purchased at high prices.”