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Maize and maize meal prices continue rising

  • Food Security Outlook Update
  • Zambia
  • August 2013
Maize and maize meal prices continue rising

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  • Key Messages
  • Current Situation
  • Updated Assumptions
  • Projected Outlook through December 2013
  • Key Messages
    • Although households in areas of concern in southern and western Zambia have started depleting their own food stocks early due to lower harvests and staple food prices are rising much earlier than usual, acute food insecurity remains Minimal (IPC Phase 1) across the country. Poor households are currently meeting their basic food needs by working for food and gathering and consuming wild foods.

    • Across the country maize prices have started rising almost three months earlier than usual as private sector demand remains high, in addition to demand by the Food Reserve Agency (FRA) which started maize purchases in late July.  Additionally, there is atypical maize demand from Malawi and Tanzania and this is also contributing to rising prices. Maize and meal prices are expected to continue rising and this will make it difficult for poorer households to adequately access staple foods from the market, especially households in the south that experienced reduced harvests and will be relying on market purchases much earlier than usual.

    • During the upcoming 2013/14 cropping season, the structure of the input subsidy program will change and small scale farmers are uncertain about how they will access subsidized fertilizers. Clarity on the implementation of this program will need to be addressed by the Government before the start of the planting period (late October/November).

    Current Situation

    In line with the Food Security Outlook from July to December 2013, Minimal (IPC Phase 1) acute food security outcomes remain country-wide.

    • Households in the northern half of the country have food stocks from recent harvest and are busy selling their maize at the peak of the marketing season.
    • Households in the south that experienced reduced production due to erratic rainfall are supplementing their food needs with market purchases, and some have finished their food stocks entirely and are fully dependent on market food purchases. The food supply situation in these areas is still mostly stable.  Most of the poor households in these areas are meeting their food needs through labor opportunities in better-off households in exchange for food. Since labor demand has been slightly reduced due to the lower harvests, poor households are also relying on brewing for income, the collection of wild foods for sale and consumption, and selling small livestock.
    • Along the river banks in the Southern and Western Provinces (parts of Sesheke, Lukulu, Itezhi Tezhi) households are meeting their food needs through fishing and or vegetable production. In general, staple food is adequately available on the market in these districts, with the exception of more remote areas with no formal markets. Households experiencing difficulty accessing food from the markets are awaiting government food assistance.
    • The government’s Disaster Management and Mitigation Unit (DMMU) is making arrangements to start staple food relief distribution targeting 209,498 people in 18 districts (mostly in southern Zambia) identified by the VAC as needing food assistance from August to March due to reduced harvests because of erratic rainfall.
    • After a two month delay, the FRA started to intensify their purchases in August. However, in many areas farmers are preferring to sell to the private traders who are offering cash and in most cases higher prices (above the K65 per 50Kg offered by FRA).  As a result of their more competitive prices, private traders are holding most of the maize stocks from the current marketing season. In addition to this, there is increased demand for maize within the region, and prices which started rising much earlier than usual (in July instead of September) are still rising in August. Maize prices across the country are generally higher than the same period last season and the five-year average. Consequently, high food prices for market-dependent households in most districts may constrain food access.  
    • With the increased supply of post-harvest grain in Zambia and the tight maize supply situation within the southern Africa region, cross border trade has substantially increased and trade flow is primarily being driven by the price differential (or as commodities move from areas with lower prices to areas offering higher prices). In July, the total monitored export volume of maize increased by 110 percent while imports rose by 40 percent with respect to the month of June. While informal exports to the Democratic Republic of Congo (DRC) rose by 70 percent between June and July, maize exports into Tanzania (due to high demand for maize in Kenya) increased by 150 percent. Although unmonitored, field reports confirmed the large outflows of maize from Zambia into Malawi due to high prices in that country. Substantially increased informal maize imports have been observed from Mozambique as traders take advantage of the higher prices in Zambia. Formal maize exports are still restricted to government to government arrangements and for humanitarian assistance needs.   

    Updated Assumptions

    The current situation has not changed the assumptions used to develop FEWS NET’s most likely scenario for the period of July to December 2013. A full discussion of the scenario is available in the Zambia July Food Security Outlook.  

    Projected Outlook through December 2013
    • Maize and meal prices are expected to continue to steadily increase until October, and this could be followed by a more rapid increase as the lean season sets in after October and as demand increases. In areas where harvests were good, farmers are earning more from their maize compared to the previous season because of the competitive prices offered by private traders.
    • Current estimates indicate that approximately ten percent of the households in parts of the Southern and Western Provinces that experienced reduced harvests this year may require food assistance. Although the food security situation is manageable in parts of the affected districts in these areas due to the availability of off-farm casual work, conditions are expected to worsen in September as demand for labor reduces and as staple food prices increase further. Some districts have already sent in reports to the DMMU requesting relief food. However, even with the increasing livelihood protection deficits, the population requiring food assistance in these areas is likely to remain under 20 percent and therefore Minimal (IPC Phase 1) acute food insecurity outcomes are expected through the outlook period.   
    • For the 2013/14 cropping season the structure of the input subsidy program will change significantly, however at the farm level information about these changes has been limited. As a result, some farmers that usually rely on the government for inputs are reportedly reluctant to use their maize in exchange for fertilizer. This could lead to reduced access to inputs for the next season and may have negative implications on timely planting and yields. 
    Figures Seasonal Calendar for a Typical Year

    Figure 1

    Seasonal Calendar for a Typical Year

    Source: 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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