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Low maize prices are anticipated as the government plans to sell stock

  • Remote Monitoring Report
  • Tanzania
  • July 2014
Low maize prices are anticipated as the government plans to sell stock

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  • Key Messages
  • Projected Outlook through December 2014
  • Key Messages
    • Harvests in the northern areas have started in July and are continuing in the South. Maize-producing areas in the South are supplying the maize-deficit northern areas. There is high demand from traders for domestic and export markets in the maize-producing areas of Mbeya and Songea, but prices are on their seasonal decline.
    • Staple food prices are at their seasonally lowest point. Low rice prices over the past months have reduced poor, rice-producing households’ purchasing power. Low maize prices throughout the country are allowing many households to access food from markets.
    • Nationwide, food security will continue at Minimal (IPC Phase 1) in most areas, but some households in Dodoma where production and incomes were affected by well below average rainfall during the December to March Msimu season will move to Stressed (IPC Phase 2) in August.
    ZONECURRENT ANOMALIESPROJECTED ANOMALIES
    Central Rift Valley areas
    • Inadequate incomes and below-normal food production as a result of erratic rains during December to March Msimu rains
    • Charcoal and firewood collection are being limited by the government.
    • Abnormally high maize prices in these areas during the harvest are eroding poor households’ purchasing power.
    • Households will begin running out of Msimu 2014 food stocks in August. Most poor households will be buying almost completely from the market by November. This is two to three months earlier than expected.
    • Poor crop production will lead to below average incomes, starting in August

     


    Projected Outlook through December 2014

    Following the end of November to May Msimu and March to June Masika rains, harvesting, drying, and marketing of crops are ongoing across the country and will continue through December. Traders and a few households are still selling their stocks from the 2013 season to prepare for storing the new harvest. The estimated surplus from the recent Masika and Msimu seasons is between 500,000 to 600,000 metric tons (MT) of maize.

    Prices have declined seasonally in a majority of markets since harvests started. However, in the major maize-producing areas of Mbeya and Songea, demand is high, but prices will soon reach their typical post-harvest lows. There are some small fluctuations attributed to price differences between the old, dry stocks and the fresh supplies from the new harvest. The older maize has a higher price as it can be immediately milled, and there has been what is likely to be a short-term increase in demand from traders taking supplies to other regions of the country and to neighboring Kenya. Overall the prices are behaving seasonally. It is anticipated that as more crops are harvested, dried, and sold from July to August, prices will return to their typical post-harvest lows. Following above average production and likely stable food prices, food insecurity will remain Minimal (IPC Phase 1) until December.

    Traders are moving food from surplus-producing, southern markets to the northern and central markets. These areas had poor September to December Vuli production, and the Masika crops are currently being harvested. These crops will likely be available by August. Rice from the major producing areas of Shinyanga, Morogoro, Mbeya, and Rukwa is moving to major urban markets like Dar es Salam and coastal areas where the population consumes rice as a staple food. Beans, an important protein source for poor households, are available in all markets from the major producing areas of the southern, unimodal areas and the bimodal areas. Bean prices are higher than normal due to low bean production in the western regions of Kigoma and Tabora. Over the past year bean production has been low due to poor rainfall, leading to lower than usual household and market stocks. This year’s average bean harvest in the Southern Highlands has improved supply and brought prices down, which in June were stable at 13 percent above the five-year average. Prices are expected to rise again in August when bean stocks will likely be depleted following high local and regional demand for beans. Poor households nationwide that purchase beans from the will likely not be able to afford their typical protein source at that time. 

    Between the first and second quarters of 2014, from January to March to April to June, Tanzania has had an atypical, 250 percent increase in cross-border export volume of maize because of a below-average harvest in Kenya and a well above-average harvest in southern Tanzania in 2013. This high volume of informal trade has helped provide income for many poor agricultural households who are selling their grain. Cross-border export to the Democratic Republic of Congo (DRC), Rwanda, Burundi, and Kenya is ongoing. The trade will remain at high volumes until Kenya starts harvesting in August/September. However, a likely below average harvest in Kenya, the regional demand will remain high throughout the scenario period. Increased food prices are anticipated across the country once the Tanzanian surplus is sold in November.

    The government, through the National Food Reserve Agency (NFRA), is planning to sell 70,000 MT of maize to local markets and 50,000 MT to the Kenyan Government in July in order to secure funds and space for new stocks from the most recent maize harvest in August. While these are relatively small amounts compared to the national surplus, this could change local prices significantly if released in the areas with high demand or in areas with already low prices. If the release of maize by the government is followed by purchases of maize to replenish stock, as expected, and if prices offered by the government are above the market price, it may increase prices for three to four weeks. However, given the size of the surplus this year, it is unlikely that higher purchase prices will be offered by the government, competing with private traders. If the government does not purchase the food stocks as expected, Sumbawanga, Mpanda, Njombe, and Songea will miss incomes that normally come from their annual government purchase. The government has allocated 32,000 MT of maize in April for distribution in food-insecure areas across the country but no plans for assessments or distribution have been made.

    Central Rift Valley areas of Dodoma and Singida

    Central Rift Valley areas of Dodoma and Singida are currently at Minimal (IPC Phase 1), but it will progressively move to Stressed (IPC Phase 2) in August as cash and household food stocks are depleted. The delayed start in December 2013 and mostly erratic rain through March 2014 resulted in reduced food and cash-crop production in Dodoma and Singida. Some crops did not reach maturity, leading to low yields. Production is estimated at 50 to 60 percent of normal. Consecutive poor harvests in the 2013 and 2014 Msimu seasons have continued to erode the poor household’s purchasing power, reducing dietary quality and quantity. In normal years at this time, the majority of poor households supplement their diet with markets purchases funded through other income-earning activities including casual labor, chicken, firewood, and charcoal sales.

    Casual labor is an important income source year round. This year, off-season, casual labor opportunities are limited. Current income sources are from chicken, charcoal, and firewood sales. As charcoal and firewood sales are destructive to the environment, the government is trying to manage these natural resources and limit their collection through issuing licenses. The number of people selling charcoal and firewood has thus fallen. Chicken-raising is a typical way households try to increase their income and access food. In 2013, households lost their chickens to an outbreak of Newcastle disease. Due to last year’s outbreak of Newcastle disease, household flock size is smaller than in other years. Additionally, the area remains at risk for another outbreak of Newcastle disease as an inadequate cold chain for distribution of the vaccine may have meant many vaccinated flocks are not necessarily immune.

    Figures Seasonal Calendar for Tanzania

    Figure 1

    Seasonal Calendar for Tanzania

    Source: FEWS NET

    Figure 3

    Source:

    In remote monitoring, a coordinator typically works from a nearby regional office. Relying on partners for data, the coordinator uses scenario development to conduct analysis and produce monthly reports. As less data may be available, remote monitoring reports may have less detail than those from countries with FEWS NET offices. Learn more about our work here.

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