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Earlier and higher demand for food purchases in local markets contributes to atypically high staple prices

  • Food Security Outlook
  • Southern Africa
  • June 2016 - January 2017
Earlier and higher demand for food purchases in local markets contributes to atypically high staple prices

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  • Key Messages
  • Outlook By Country
  • Countries Monitored Remotely
  • Key Messages
    • The impacts of last year’s El Niño induced drought continues to be felt as an increased numbers of households across the region are facing significant food and livelihood protection gaps from June to September. Significant number of households in affected parts of Zimbabwe, Malawi, Mozambique, Madagascar, Lesotho, and Swaziland continue to experience Crisis (IPC Phase 3) and Stressed (IPC Phase 2) outcomes. Between October and January, these outcomes are expected to deteriorate even further as food prices peak and supplies become scarce during the peak lean season. Some areas that are currently Stressed (IPC Phase 2) will be in Crisis by the end of outlook period. Conditions in Madagascar are expected to worsen and an area in the southernmost region of the country will be in Emergency (IPC Phase 4). Small pockets of households in Emergency are also possible in southern Malawi and southern Zimbabwe.

    • Normally harvesting for the main season stretches into July in most countries, but this season it was almost complete by the end of June instead since households either had little crop to harvest following the drought or experienced total crop failure. Households that normally earn incomes for food purchases through harvesting labor have been seriously affected by below-average opportunities and wages. Similar decreases were observed for non-farm income activities like brick molding, grass sales, and gardening, since these livelihood strategies have been affected by poor rainfall performance as well. Because of limited income earning opportunities, poor farming households are unable to purchase all that is needed for their food needs. 

    • With the exception of Zambia, every country in the region has a national cereal deficit this marketing year because of the drought. Market purchases remain the main source of staple in most countries, forcing poor households to extend their coping and livelihood strategies for the second consecutive year in some marginal producing areas. Maize grain prices are above the five-year average and June 2015 prices across all monitored countries, especially in Mozambique and Malawi. The main drivers of these increases are low local market supplies and unusually high consumer demand due to significant production decreases. Sub-national level information about the planning, funding, and likelihood of humanitarian assistance programs was not available for the national Outlook analyses in June, but is expected to become available and incorporated into national food security analyses within the next few months. 


    Outlook By Country

    Malawi

    • The results of the Household Economy Approach (HEA) outcome analysis conducted by FEWS NET in May 2016 indicate that a large population of very poor and poor households, especially in the south, will experience Stressed (IPC Phase 2) and Crisis (IPC Phase 3) acute food insecurity outcomes, requiring emergency assistance to protect livelihoods and cover food consumption gaps. By the October to January period, the situation will worsen and middle income, as well as poor, and very poor households will face Stressed and Crisis outcomes.
    • Average national prices for maize have stabilized but are still at a record high when compared to the five-year average. However, the stability is short-lived as prices in most key supply and consumer markets are reported to have started steeply increasing in June. Typically, prices decline in the harvest and post-harvest period, but this year key markets are already registering increases.
    • After experiencing drought due to one of the strongest El Niño events on record in the 2015/16 cropping season, early forecasts indicate that a La Niña event could result in average to above-average rainfall during the next cropping season in Malawi. However, FEWS NET’s analysis explains that even a normal start to the 2016/17 cropping season is not expected to improve acute food insecurity outcomes because of the level of distress sales and crisis coping that households exhibited prior to the 2016 harvest and the extremely high maize prices projected for this year.

    To learn more, read the complete June 2016 Malawi Food Security Outlook.

    Mozambique

    • In the El Niño drought-affected areas in the South and parts of the central region, poor households are currently facing Crisis (IPC Phase 3) acute food insecurity as they face significant difficulty meeting their basic food needs. However, much of the rest of the population are able to meet their basic food needs due to the ongoing harvest in other areas of the central region and the North. The majority of households remain in None (IPC Phase 1) acute food insecurity.
    • Currently maize grain prices are 125 percent above the five-year average. They seasonally decreased with the start of the harvest, but are expected to rise from June 2016 to January 2017. The demand for substitute commodities, such as maize meal and rice, will also lead to price hikes. These prices will further limit purchasing power as households face limited earning opportunities.
    • Due to the significantly below-average harvest, the lean season will begin in August, about two months earlier than normal. Food stocks will continue to fall as second season crop production yields will be lower. In October, agricultural labor opportunities will increase with the start of the rainy season, which is expected to be average to above-average due to an anticipated La Niña. However, this could lead to moderate to severe flooding in January 2017.
    • In the most affected areas, from October to January 2017, poor households will expand their livelihood and coping strategies to meet their food needs. They are expected to intensify self-employment opportunities, consume wild foods, and will still require emergency food assistance because of their food consumption gaps. The poor and very poor will continue to face Crisis (IPC Phase 3) food security outcomes in January 2017, with needs likely to increase until the harvest in March 2017.

    To learn more, read the complete June 2016 Mozambique Food Security Outlook.

    Madagascar

    • As a result of an El Niño driven drought that affected the 2015/2016 agricultural season, main and off-season harvests were well below-average or failed, depending on the crop and zone,  in parts of the south including Tsihombe, Ambovombe, southern part of Amboasary, Beloha, Bekily, Ampanihy coastal and Betioky Atsimo.
    • In worst affected pockets of Androy region, particularly in the municipalities of Anjampaly, Betanty, Antaritarika, and Marovato in Tsihombe and Tranovaho and Beabobo in Beloha, households are expected to face large food consumption gaps, in line with Emergency (IPC Phase 4) outcomes between October and January. Humanitarian assistance will be needed to fill these food deficits, protect livelihoods, and prevent acute malnutrition. Other drought-affected areas of the south will face Stressed (IPC Phase 2) or Crisis (IPC Phase 3) food insecurity.
    • In central and northern areas, a near-average or above-average rice harvest, depending on the zone, favorable cash crop prices, and normal livelihood strategies will enable seasonally normal food access. These areas will remain in Minimal (IPC Phase 1) acute food insecurity throughout the scenario period.

    To learn more, read the complete June 2016 Madagascar Food Security Outlook Report.

    Zambia

    • Zambia attained average 2015/16 maize production despite a late start of the season and erratic rainfall. The estimated maize production is 2.87 million MT against the national requirement of 2.9 million MT. Average production was also attained for sorghum, millet, and groundnuts.
    • Erratic rainfall in parts of southern Zambia resulted in below-average production in localized areas. Stressed (IPC Phase 2) acute food insecurity outcomes are expected in these southeastern and southwestern areas during the outlook period. For the remainder of the country, acute food insecurity will remain Minimal (IPC Phase 1).
    • The 2016/17 marketing season has opened with maize prices at least 35 percent above the previous season and well above the recent five-year average. Prices are likely to remain very high due to strong demand for Zambian maize since most of the southern Africa region is facing large maize production deficits this marketing year. The government recently announced that maize exports from new harvest would begin after September 2016 in order to allow the FRA adequate time to purchase maize for the strategic grain reserves and additional maize for price stabilization during the lean season.
    • A La Niña event is likely to develop by late 2016 and tends to be associated with average to above-average rainfall in Zambia. A normal start to the next cropping season is expected for now, however updated forecasts are still forthcoming.

    To learn more, read the complete June 2016 Zambia Food Security Outlook.

    Zimbabwe

    • Crisis (IPC Phase 3) acute food insecurity outcomes are expected to continue among poor households in the south from June 2016 through January 2017. This is mainly due to very low 2015-16 crop harvests, increasing economic hardships, and anticipated below average livelihood options. Poor households in parts of the traditional maize-surplus  areas in the north will mainly be Stressed (IPC Phase 2) because of livelihood protection gaps due to below average crop harvests as well as prevailing liquidity challenges.
    • Although the government has not yet released the official crop production report, maize production from the 2015-16 cropping season is estimated at levels ranging from 35 to 50 percent of the five-year average. This means that for the 2016-17 consumption year the estimated national cereal deficit will be over 1 million MT. FEWS NET anticipates that the gap will be partly filled through international imports outside of the region since most of the southern Africa region is facing large maize production deficits resulting from El Niño-induced poor rains. Maize supplies on most markets across the country is expected to be lower than typical and prices are expected to be above average throughout the Outlook period.
    • Since the start of the main harvest in April, the national economy has been impacted by critical cash shortages and this is negatively impacting basic economic and livelihood activities, including remittances, agricultural and non-agricultural labor, as well as self-employment opportunities in rural and urban areas. From early May, the government announced the implementation of a number of measures to address this situation.

    To learn more, read the complete June 2016 Zimbabwe Food Security Outlook.


    Countries Monitored Remotely

    Lesotho

    • The results from the annual Lesotho Vulnerability Assessment Committee (LVAC) indicate that about 48 percent of the rural population in Lesotho is at risk of acute food insecurity during the current consumption year. The Household Economy Approach (HEA) outcome analysis completed by the LVAC, indicate that approximately 34 percent of the rural population will not be able to meet their survival food and non-food needs, and about 14 percent will not be able to meet their livelihood protection needs. The projected food insecure population this year will be 43 percent above the five-year average.
    • Based on the LVAC analysis, the main drivers of high food insecurity this year are crop production and high staple prices. Most poor and very poor households that experienced significant crop losses this season are currently relying on food purchases from local markets. Staple prices are expected to increase to levels that are 17-30 percent above the five-year average, which will erode purchasing power and constrain food access during the June-September period. Most areas in Lesotho will experience Crisis (IPC Phase 3) outcomes during the June to January period.
    • Food consumption among poor and very poor households is being hampered by high staple prices. Households are not able to afford non-food essentials and they are facing food consumption gaps. Some households have already decreased the number of meals that they eat per day, as well as the types of foods that they consume. However, the prevalence of GAM remains below the WHO emergency threshold. The prevalence of stunting continues to be high across the country, possibly reflecting the consumption of poor quality food and other underlying chronic issues.

    To learn more, read the complete June 2016 Lesotho Remote Monitoring Report.

    AREAEVENTIMPACT ON FOOD SECURITY OUTCOMES
    Entire regionIncreases in global fuel prices.Even earlier than normal increases in staple prices, further constraining food access in a number of countries across the region.
    Zimbabwe, Swaziland, Mozambique, Zambia, MalawiFurther depreciation of local currencies.Continued weakening of currencies will likely affect the ability of countries to import cereal and will likely result in limited market supplies and significant price increases.
    Mozambique, Madagascar, parts of Zimbabwe, southern parts of MalawiFlooding between December and January.Excessive flooding could affect planting activities and result in crop loss and destruction of infrastructures, affecting 2016/17 production levels in affected countries.
     
    Figures Seasonal calendar for a typical year

    Figure 1

    Seasonal calendar for a typical year

    Source: FEWS NET

    Current food security outcomes, June 2016.

    Figure 2

    Current food security outcomes, June 2016.

    Source: FEWS NET

    To project food security outcomes, FEWS NET develops a set of assumptions about likely events, their effects, and the probable responses of various actors. FEWS NET analyzes these assumptions in the context of current conditions and local livelihoods to arrive at a most likely scenario for the coming eight months. Learn more here.

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