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Assumptions for Quarterly Food Security Analysis

  • Food Security Outlook Update
  • Southern Africa
  • September 2014
Assumptions for Quarterly Food Security Analysis

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  • Preface
  • Markets and Trade
  • Start of season (SOS)/ Agroclimatology
  • Farm and off-farm labor opportunities and remittances
  • Pest Infestations and Disease Outbreaks
  • Humanitarian Assistance

  • Preface

    To project food security outcomes, FEWS NET uses scenario development. Commonly used by planners and researchers to forecast likely events, this methodology takes a set of informed assumptions about the future and compares their possible effects. Scenario development cannot predict exact outcomes but it structures the analysis and helps minimize uncertainty. This report, developed by FEWS NET analysts based on current evidence, outlines assumptions at the regional level. Analysts also develop assumptions at the country level, which are specific to that country and likely to be more detailed. Together, the regional and national assumptions are the foundation for the integrated analysis reported in FEWS NET’s Food Security Outlooks and Outlook Updates. Learn more about FEWS NET and scenario development at www.fews.net.

     

     FEWS NET’s Food Security Outlook reports for October 2014 to March 2015 are based on the following regional assumptions:


    Markets and Trade
    • Regional availability of staple cereal in the region will be above average following the good performance of the 2013/14 rainfall season.  Cereal production in the region is 21 percent higher than the five-year average.  Maize production, the region’s main staple food, is 24 percent above the five-year average.  All countries with the exception of Lesotho registered cereal production that is above average and above last year’s levels. The three largest maize producers (South Africa, Tanzania and Zambia) registered significant increases in production compared to the five-year averages, with 21 percent for South Africa, 28 percent for Zambia, and 40 percent for Tanzania.
    • Domestic availability of cereal including carry-over stocks from the 2013/14 consumption year is expected to be sufficient to cover regional requirements. From available estimates, FEWS NET projects that staple cereal availability is projected to be about 44 million MT for the 2014/15 consumption year while the requirement, including human consumption, industrial use, and desired Strategic Grain Reserve carry-over stocks for the 2014/15 consumption year, stands at about 40 million MT[i]. The 2014/15 domestic availability is currently projected to be 15 percent above the five-year average.  South Africa’s maize surplus is projected at just over 2 million MT, while for Tanzania and Zambia maize surpluses are projected at just over a million MT each.   Malawi, another significant maize producer has registered a more modest increase of seven percent over the past five-year average and projects a modest surplus of less than half a million MT on account of localized areas of poor harvest as due to dryness and early cessation of rains.
    • South Africa, with the largest maize surplus is expected to remain the main regional import market for all SADC member states facing maize deficits. These countries, including Botswana, Lesotho, Mozambique, Namibia, Swaziland, and Zimbabwe will be able to cover their maize import requirement (projected at 1.4 million MT) from within the region. Given this much lower level of regional import requirement compared to available exportable surpluses, South Africa, Tanzania and Zambia will all have to look further afield for export opportunities. South Africa’s major international export destination will remain the Asian market; between May and July 2014, the Department of Agricultural, Forestry and Fisheries (DAFF) issued export permits of over two million MT, most of them destined for Japan, Korea, and Taiwan.  By the end of August, the South African Grain Information Service (SAGIS) reported that South Africa had already exported 1.1 million MT regionally and internationally. 
    • South African maize exports will be supported by increased maize price competitiveness in the world market, due to a weakening South African Rand – United States Dollar exchange rate as well as a 46 percent decrease in local maize prices between January and July 2014. The depreciation of the rand, which since the beginning of 2013 lost more than 20 percent of its value, is expected to continue due to South Africa’s protracted labor unrest in the mining and farm sectors due to protests and workers call for better wages. Expectations are that this trend will continue.
    • The East African market (particularly, Kenya) will remain Tanzania’s largest export  market due to high demand to cover production shortfalls resulting from reported crop failure in some parts of that region. Tanzania opened the 2014/15 consumption year with large carry-over stocks of maize (over half a million) which have been augmented by above average harvests in the country’s productive areas.  As a result of the above average production in Tanzania and Zambia, there is a high likelihood that the price differential between Mbeya (Tanzania) and the adjacent markets in Zambia will narrow considerably; reducing incentives for cross-border exports to Tanzania for re-export to Kenya. However, if Kenya cannot source all of the 200,000 MT government-to-government imports from Tanzania in order to fill the expected 20 percent drop in 2014 production, then there is likely to be increased formal and informal volumes from Zambia.
    • Zambia’s maize export opportunities will remain constrained as long as the maize import ban imposed by Zimbabwe, its major export market, remains in place.  While the Government of Zambia lifted the export restrictions in April this year to allow for more robust cross-border exports, overall formal and informal cross-border exports are expected to be less robust, in light of limited export opportunities within the region.  The good harvests in neighboring countries are likely to reduce the amounts that Zambia can potentially export regionally. 
    • While current trends in informal maize flows indicate an increase of Malawi exports into Tanzania, it is expected that as the lean season progresses, the direction of flows will reverse, with Tanzania exports to Malawi increasing typically.  Between June and July, informal maize exports from Malawi rose 163 percent and remained at similar levels during the month of August as Tanzanian traders respond to the demand to supply the 200,000 MT consignments for Kenya.  Informal inflows from Mozambique to Malawi are also expected to increase seasonally but are likely to remain below past five-year average due to generally above-average harvests in those areas of Malawi where cross border trade is most active. 
    • SAFEX spot prices are expected to follow seasonal trends and increase steadily between October and December before peaking in February 2015.  Prices are expected to trend lower than their respective 2013 and closer to their respective five-year averages due to above average production this year.  SAFEX maize price levels which have a bearing on regional food access will also continue to be influenced by global maize price trends currently significantly lower than their respective 2013 levels due to favorable crop prospects in key international maize producing and exporting countries. 
    • Maize prices in Tanzania and Zambia will remain higher than SAFEX spot prices (Figure 1) making South Africa the preferred import market in the region.  In July, the price of maize at Choma market in Zambia and Mbeya in Tanzania were 17 and 47 percent higher than the SAFEX price.
    • International crude oil prices are currently stable according to the World Bank after prices were balanced by an increase in supply from the easing of previous production disruptions in Iraq in early July, the reopening of export ports in Libya that had been closed for almost a year, and the rapid expansion of unconventional oil production in North America. However, in FEWS NET countries, fuel price trends in the outlook period will vary depending, not only on the international market conditions, but also on the evolution of local exchange rates in relation to the U.S. Dollar, as well as the design and implementation of local fuel import and price policies.

    Start of season (SOS)/ Agroclimatology
    • There is an approximately 66 percent chance that an El Niño will develop by the start of the 2014/2015 season and observed El Niño-like conditions are expected to continue in the Pacific Ocean. The El Niño phenomenon is generally associated with below-average rainfall (40 percent chance or more) in many southern parts of the region. While El Niño increases chances of below average rainfall affected areas vary with every El Niño occurrence.
    • The October to December rainfall totals are expected to be near normal to above normal in most parts of the region, particularly the central and northern parts of the region, based primarily on the SARCOF forecast and several international forecasts, and typical El Niño-associated impacts.
    • The January to March rainfall totals are expected to be near normal in most areas, although some of the southern and central areas may experience below-normal rainfall, as suggested by some international forecasts, as well as typical El Niño trends. In areas like parts of Botswana, South Africa, Angola and Namibia, with long-term poor rainfall availability due to poor rainfall over the last few seasons, this outlook expects the prospects of poor water availability to continue.
    • With the current uncertainty about the evolution of the current El Niño conditions, more emphasis will be placed on downscaled national/ local level seasonal forecasts which are likely to be available for all SADC countries by the end of September. 
    • The forecast for normal to above-normal rains in some areas may increase chances of flooding in some of the flood-prone areas in the region, including parts southern Malawi, central Mozambique, western Zambia and northern Zimbabwe.
    • The December 2014 to February 2015 Vuli rains in northern Tanzania are expected to be normal to above normal, according to the SARCOF forecast and several international forecasts, and typical El Niño-associated impacts.
    •  The start of season is expected to be timely and consistent in some areas, particularly where most forecasts are anticipating above-normal October-to-December rainfall. In these areas, the onset of rains is expected to be similar to or earlier than the median onset (Figure 2). However, the presence of an El-Niño like conditions and a negative Subtropical Indian Ocean Dipole suggests that some areas may experience a poor onset of rains however. 

    Farm and off-farm labor opportunities and remittances
    • It is expected that from October onwards, the rains will begin throughout the region and this will facilitate activities such as land preparation and planting. However, given the prevailing El Niño conditions, and the associated impacts on rainfall performance, it is likely that some parts of the region will experience a delayed and/or erratic start of season SOS, thus affecting availability of agricultural labor opportunities at the time when these are typically expected to start increasing in the period October to December. The drier conditions expected in the January to March period, and the possibility of mid-season dry spells in some parts of the region could reduce opportunities for agriculture labor, particularly for harvest during the months of February and March 2015.
    • Although migrant labor opportunities in South Africa remain constrained due to rising labor costs in the farming and mining sectors, it is expected that numbers of those migrating for such opportunities will remain at levels typical for this time of year.  However, levels of remittances are likely to be below typical levels if those migrating fail to secure casual labor opportunities. This will have more of an impact on households that rely more on this source of income in Lesotho, Mozambique, and Zimbabwe. 

    Pest Infestations and Disease Outbreaks
    • The International Red Locust Control Organization for Central and Southern Africa (IRLCO-CSA) reported in August that the region is likely to be free of Army worm outbreaks, given current control measures following the outbreaks in the 2012/13 rainfall season.   The army worm season begins with the onset of rains in October/ November.
    •  The IRLCO-CSA also warns that Red Locust swarms and concentrations that have persisted in the Kafue Flats of Zambia; the Buzi Gorongosa and Dimba plains in Mozambique, and the Ikuu-Katavi plains, Wembere and Malagarasi Basin of Tanzania following extensive vegetation burning, are likely to be concentrated further into dense swarms within these primary outbreak areas. This situation is potentially dangerous, as swarms, if not controlled, are likely to escape into adjacent areas or even further afield into neighboring countries and cause damage to crops and pasture. If the current shortage of resources faced by the IRLCO-CSA to undertake aerial surveys and control interventions persists, the outbreaks could cause damage to crops/pasture in the outlook period. 
    • In the June Food and Agriculture Organization (FAO) Locust Situation Update for Madagascar it was reported that no further massive breeding is expected to occur before the rainy season that starts in October. Following intensive and large-scale aerial control operations carried out through the on-going campaigns, the number and size of the locust swarms has decreased significantly throughout the country, both in the invasion and outbreak areas. Nevertheless, as the rainy season begins, close monitoring of all locust populations as well as continuation of control operations will be required.

    Humanitarian Assistance
    • During the outlook period humanitarian assistance needs are expected to increase at typically levels from November to February because this period is the lean season throughout the region. The lean season is when most poor households’ own stocks start dwindling and reliance on market purchases increases. Needs are expected to be greater in areas projected to experience Stressed (IPC Phase 2) or higher acute food insecurity outcomes.
    • Opportunities for Local and Regional Purchases (LRP) for humanitarian food commodities will improve this 2014/15 consumption year given current national demand/ supply projections which show improved availability of tradable maize this year, especially from Zambia (the main source of LRP), and Tanzania. Based on recent past levels of LRP purchases of non-GMO maize by the World Food Program (WFP), the available maize after trade surpluses will be more than sufficient to cover any local procurement requirement that WFP may have to cater for its programs in the countries that have strict policies on GMO maize.

    [1] This analysis excludes the DRC, Madagascar, and Seychelles.

    Figures Seasonal Calendar

    Figure 1

    Seasonal Calendar

    Source: Fews Net

    Figure 1. White maize prices and projections in main reference markets in surplus producing countries.

    Figure 2

    Figure 1. White maize prices and projections in main reference markets in surplus producing countries

    Source:

    Figure 2. Median start of season based on 2001-2012 data.

    Figure 3

    Figure 2. Median start of season based on 2001-2012 data.

    Source: USGS/FEWS NET

    This Food Security Outlook Update provides an analysis of current acute food insecurity conditions and any changes to FEWS NET's latest projection of acute food insecurity outcomes in the specified geography over the next six months. Learn more here.

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