The report shows that the 2016/17 marketing season which opened in May has started with much higher maize price levels compared to the previous season.
“Given this situation, maize prices will trend above the levels that prevailed in the previous season for the duration of the outlook period. The prices will be relatively stable between June and July but start rising early (by August) initially steadily then more steeply as the lean season starts in November,” it says.
The report forecasts that throughout the outlook period, maize retail prices will remain at least 60 percent above the recent five-year average.
This is attributed to strong regional demand for Zambian maize as most of the marketable surplus will be in the hands of the medium and large traders and the FRA.
It says although the FRA is planning to purchase 1 million MT of maize during the June to September period at the new fixed price of K85/50 kg, they may fall short of their target.
“Additionally, the private sector has extended its purchase area to include some high producing areas in northern Zambia where the FRA purchased most of their maize in the last marketing season. The very attractive regional market will support very large maize volume purchases by the private sector this season,” it says.
“Since the FRA will purchase above the 500,000 MT strategic reserve target, they will enter the market to sell the grain to the millers for price stabilization during the lean period (Nov –Jan period). However, due to the expected high regional demand, prices are likely to remain high and the intervention is likely to have limited impact on the market as was the situation in the just ended marketing season.
Zambia attained average 2015/16 maize production despite a late start of the season and erratic rainfall with an estimated maize production is 2.87 million MT against the national requirement of 2.9 million MT.