It is the season af marketing and trade, during which maize move across borders in southern Africa. Due to the general good harvest and abundant supply, prices remain low, except in eastern Africa, where the harvest is still going on.
Maize imports have increased from mid-June and harvesting is still going on in the Central, Eastern and Coastal regions, which leads to improved national food security. Uganda also had their harvesting season in the main maize growing regions between June and July. This contributed to increased imports into Kenya and a subsequent decline in prices.
In recent weeks, the price of maize was declining across all Kenyan markets as many parts of the country have started harvesting. The ongoing crop harvests, expected to peak in mid-October, should weigh on prices but also stabilise food security.
New crop growing conditions are still reasonable but the general market view remains that the late start to the rainy season, erratic rainfall in some areas and fall army worm damage could see the long-rains crop 10-20% below normal.
Despite the large level of maize imports driven by higher prices in Kenya, maize prices remain 35-60 % above average. The Consumer Price Index released by the Kenya National Bureau of Statistics showed that July inflation decreased and food was less expensive.
Government continues to subsidize white maize (WM) and is expected to do so until end of September. The Government of Kenya’s promise to import more maize at a much lower price seems to have finally pushed the price of maize on a downward trend.
The Agriculture ministry has indicated that it has reduced the volumes of subsidised maize offered to millers to ensure processors were not in possession of cheap maize ahead of the September 30 deadline. This follows the announcement by the Government of Kenya in May that they would grant temporary subsidies to maize importers and to sell imported maize to millers at a discount. These efforts by the government were aimed at offsetting the maize deficit and stabilise prices. Retail maize prices had been on an increasing trend since early 2017.
The reduction of the Common External Tariff (CET) from 35% to 15% led to increased imports by wheat processors who imported in bulk owing to an indication that the government may soon increase CET back to 35%. Currently the country has an oversupply of wheat. Wheat harvesting has also been ongoing in the South rift region (Narok) of the country.
The maize harvest in Zambia is complete and the country is now in the marketing season. The country has recorded a bumper harvest which has led to a decline in maize prices. Maize prices in recent weeks have been following a downward trend as a result of higher production levels this season.
White maize is currently trading at around $137 per ton. The industry is hopeful that lower maize prices will bring about export opportunities.
Meanwhile the Zambian National Farmers Union (ZNFU) continues to express dissatisfaction over the price announced by the Food Reserve Agency (FRA). The FRA recently announced Zambia K60 (about US$6.7) as the floor price for a 50 kilogram bag of maize in the current marketing season from Zambian K80 in the previous marketing season.
The Union made it very clear that the price of Zambian K60 was below the cost of producing maize. The union further appealed to farmers to find the best possible ways of storing their maize and not to sell to the FRA, especially since the agency does not offer spot cash. The union urged producers to start marketing their maize from November 2017 through to July 2018, when they maize prices should improve.
Soya bean prices have also dropped in comparison to the previous season because current supply is much higher. Soybeans prices have plummeted over the past few months but have stabilised in August.
The number of live cattle marketed from Namibia to South Africa continues to grow from month on month. In July 2017, 3.9% more live cattle were exported than in June. This may be attributed to strong demand in South Africa on the back of weaner scarcity in that region.
The Namibian weaner prices have since increased by 22% in July 2017 compared to June. Namibian livestock prices were also supported as the recovery in grazing conditions encouraged the retention of animals. Stronger South African demand has added a bullish tone to this market.
Livestock also benefited as grazing conditions improved following the better rains after the drought of 2016. However, the southern part of the country was not as fortunate and producers do not have sufficient feed available for their livestock.
Sheep prices also remained on the increase. The A2 sheep price increased 8.5% from June 2017 to July. These increases in prices were supported by strong demand from South Africa.
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