La Niña

March African markets: Zambia, Namibia, Zimbabwe and Kenya

Regional markets are filling up with cereal from harvests, after increased rainfall during planting season, but fall armyworm is a threat, if not properly managed.

ZAMBIA

The 2016/17 maize crop in Zambia is expected to recover from the reduced harvests of the past year, with the high prices expected to encourage higher plantings. Increased export demand may also contribute positively to production of the Zambian crop. Export demand from regional partners and high regional prices encourage plantings. The risk to the maize crop outlook is however an outbreak of armyworms in the region, which could reduce yields if not properly managed.

There are enough maize stocks available generally in Zambia from the 2015/16 harvest. Carryover stocks are expected to meet demand until the end of the current marketing season in April and beyond that point. Despite the large amount of in country maize stocks and the continued maize export ban, retail maize and meal prices remain high. It is in line with seasonality for maize prices to follow a downward trend from April onwards due to harvest pressure from the main maize cropping harvest and also benefiting from food supplies from the green harvests also entering the market.

Fig 1: Zambian maize and soybean production in 000' tons.
Fig 1: Zambian maize and soybean production in 000′ tons.

NAMIBIA

Livestock imports from Namibia into South Africa improved during the months leading up to December 2016. Weaners are ordinarily imported from Namibia in large quantities. However, given the South African Government’s strict import requirements the import of live cattle was halted on 1 July 2016. In June and July 2016, the number of live cattle imported drastically reduced from 31,837 to only two cattle units. This had a negative impact on prices, as this put prices received by Namibian producers under severe pressure.

Alternatively, weaner prices in the South African market followed an upward trend during that period. The end of the year saw a gradual increase in live imports with levels reaching 17,655 and 14,015 cattle units in November and December respectively, during which the Namibian weaner prices recovered and followed an upward trend. Conditions surrounding imports and exports are important, and play a part on the marketing of and the price of cattle as was the case for Namibia and South Africa in 2016. Cattle livestock exports to South Africa from Namibia accounts for 56% of the total market share with a total of 165,927 animals exported in 2016.

Namibian Livestock and weaner calf prices (N$/kg).
Namibian Livestock and weaner calf prices (N$/kg).

ZIMBABWE

Supply of maize in Zimbabwe is expected to improve during April onwards, as maize start to come through to the market from the main harvest.

Favourable rainfalls during the production season and increased area planted will positively impact on the total crop realized leading to a recovery from the 2016’s drought reduced output. Despite favourable rainfall, areas in the south are expecting below-normal cereal production due to crop input shortages, pests, and low cropped area. The north and other high maize producing areas are expected to have average production this season.

However, the heavy rainfall has also contributed to soil erosion, crop damage, waterlogging, and leaching in most areas which may limit yield potentials in the affected areas. In addition, an outbreak of fall armyworm may pose as a risk to the crop outlook if not properly managed.

Production of cotton and tobacco are also expected to increase in 2017, mainly supported by an expansion in the sown area.

KENYA

As a result of the below-average 2016 crop production from both the long and short rain harvests, and reduced regional imports from neighbouring countries that also experienced below-average production, supplies are declining in the Kenyan market. The declines in the availability of most staple food commodities in the markets come at a time of sustained high demand. This leads to increases in staple food prices across most markets.

The national food security situation is expected to remain fairly stable at least through May, as a steady supply of most staple food commodities in the markets continue however at a smaller pace. On the other hand, maize supply is expected to be limited in East Africa in 2017 resulting from below average harvests across most countries. As a result, maize prices in Kenya are expected to gradually increase through mid-2017, as supplies tighten.

On the brighter note moving forward, the Kenya Seed Company has assured farmers of adequate certified seed stocks ahead of the planting season which is expected to begin from April in most parts of country.

Kenyan maize and wheat prices (US$/t) for 2016.
Kenyan maize and wheat prices (US$/t) for 2016.

Market report supplied and compiled by Karabo Takadi, agricultural economist at ABSA.

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