Absa’s most recent monthly market outlook over the most important commodities in southern Africa looks at the fall of weaner exports from Namibia to South Africa, the low supply of grain in Kenya and the impact of the fall army worm in Zambia.
Production expectation in Namibia looks positive in 2017 as a result of the beneficial weather and good access to agricultural inputs. Seasonal rains started in November in northern parts of the country, which encouraged planting activities and benefited the establishment of early crop.
Weather forecasts throughout the season are positive, pointing to enhanced probability of above rainfall through to May in the main cropping regions. According to a Government assessment carried out in early November, availability and access to agricultural inputs were reportedly good boding well with the production of cereal.
This follows unfavourable production conditions during the 2015/16 production season resulting poor seasonal rainfall due to drought induced conditions. The recovery in crop production in 2017 is expected to improve food security in the country.
Livestock exports to South Africa peaked up during the months leading to December 2016 after great progress was made in permit negotiations between the two countries. Namibia normally exports weaners to South Africa in large quantities, but exports were put to a stop since the 1st of July 2016 following strict import requirements from the South African government.
Live cattle marketed to South Africa during the July and August was insignificant. Live cattle numbers declined from 31837 heads in June 2016 to only 2 in July 2016 before recovering and reaching levels of 17655 and 14015 during November and December respectively. The lower number of cattle marketed to South Africa between July and October followed the strict import restrictions which were implemented during the first of July 2016.
Livestock conditions still remained poor, with losses continuing to be reported. However, the recent heavy rains will be beneficial to the recovery of pasture conditions. The recent rains will also help to restock water reserves following two consecutive drought-affected cropping seasons.
As a result, livestock conditions are expected to improve moving forward. For the past 2-3 years Namibia suffered from a severe drought resulting in emergency marketing and declining herd numbers. It is expected that the herd recovery phase will take at least another 2-3 years.
Kenya is facing low supply of grains which is driving prices high. Retail maize prices are expected to increase through 2017. Maize prices increased by 5% during the period September to December 2016. Kenya has traditionally imported grains from Uganda and Tanzania to in order to meet their need and bridge the shortage, but Tanzania last November restricted export of maize, while Uganda does not have enough supplies for exports after a poor harvest last season.
The poor performance of the short rains crop means that there is increased competition on the market in terms of demand. Near total maize crop failure is expected in the southeastern and coastal agricultural areas, following the poor short rains and early ending.
The hotter than normal temperatures have increased fodder and water depletion across most of the pastoral and marginal agricultural areas. The forecast for below average March to May long rains in both bimodal and unimodal areas will likely worsen the situation.
Due to a slightly delayed start of seasonal rains and below average precipitation between October and December, planting of the 2017 cereal crops was still taking place at the beginning of January. Weather forecasts for the remainder of the 2016/17 main summer cropping season show an outlook for above average rainfall conditions. The rains are anticipated to improve crop conditions.
The Government has reportedly continuing to support farmers’ access to inputs through the Farmer Input Support Programme (FISP), which will boost production. The 2017 agricultural outlook is overall favourable and an above‑average maize harvest is expected.
Maize prices remain high as the peak of the lean season commences and demand for staple food from the market rises. This comes despite large in country stocks. Prices are high in the towns bordering the DRC due to the high demand for Zambian maize, even with the maize export ban in place. Export of maize meal reportedly continues through unusual routes between the two countries.
On the downside, there has been a widespread outbreak of both stalk borers and the fall armyworm in Zambia. As of January the 9th, Disaster Management and Mitigation Unit (DMMU) reported that an estimated 129,000 hectares of maize were affected. This could have negative impact on production outcomes in affected areas.
Government under the coordination of the DMMU and the Ministry of Agriculture is providing pesticides to farmers to help bring the situation under control. Suspected outbreaks have erupted in many other Southern African countries including Zimbabwe, Malawi, South Africa Namibia and Mozambique.