Large maize surplus attained despite erratic rainfall in the southern half

• The food security situation has generally remained favorable and prices stable as the 2012/13 marketing season commences. Acute food insecurity is minimal in most areas of the country (IPC Phase 1) and is expected to continue throughout the Outlook period.

• For the third consecutive season Zambia has attained another large maize surplus, despite erratic rainfall during the harvest in the southern parts of the country. The country’s exportable maize surplus stands at 1.04 million MT. Zambia stands to gain from putting in place an aggressive maize export program as Malawi’s maize export ban remains in place and South Africa expects a substantially reduced surplus.

• Although the production of tobacco and maize seed substantially declined, both cotton and soybeans have recorded high production increases with respect to the previous season, driven primarily by attractive prices in the 2011/12 marketing season. 

• The retail price of maize and maize meal remained stable and in some cases declined as the Food Reserve Agency (FRA) continued market sales at fixed prices. As the harvest arrives, household food stocks continue to increase, reducing market demand for staple food in the rural areas. 

As the country enters the 2012/13 marketing season and consumption year, food security conditions remain stable and continue to improve. Currently there is a continued supply of staple foods to markets, stable prices, and an increasing variety of seasonal foods at the household level in most rural areas as well as the estimated large harvest from the 2011/12 production season.  Despite the extended dry spells experienced in the southern half of the country at the start and middle of the growing season, official production estimates from the Ministry of Agriculture estimate only a slight drop (6 percent) in maize production. This has been partly attributed to increased use of hybrid seed among small scale farmers. Furthermore, the reduction in planted area with respect to the previous season was minimal or only 6 percent. According to government estimates, maize production for the 2011/12 production season has been pegged at 2.85 million MT. Although this is a drop from the 3.02 million MT attained in the 2010/11 season, this figure is still well above the recent five year average of 2.1 million MT. This surplus maize production combined with a large carryover stock from last season (771,000 MT) has increased national maize availability to 3.62 million MT, which is well above the national requirement of 2.59 million MT. In general, the country has a large surplus of 1.04 million MT that will be available for export.

The erratic rainfall experienced in the southern half of the country resulted in a reduction in the area harvested for maize in Central, Southern, Lusaka and Western Provinces and therefore a drop in output (see Figure 3). However, this drop was significantly lower than what was expected. Although the impact on crops was severe in localized parts of the affected districts, in other areas production was good making up for losses.

Despite the fact that the country is producing substantially less non-food staples including tobacco and maize seed, considerable increases were made in the cash crop production of cotton (121 percent) and soybeans (74 percent) when compared to the previous production season. These changes were primarily driven by attractive prices in the 2011/12 marketing season (see Figure 4). The impact of the 56 percent reduction in maize seed production, predominately on commercial farmers, on seed availability for the 2012/13 production season remains to be seen.  During the current season commercial farmers predominately preferred to cut back on maize and increase their soybean production, while small scale farmers continue to dominate cotton production. 

Based on the projected above-average harvest, better than expected crop performance in southern Zambia and the increased food stocks at household level, the food security situation in most areas is currently favorable and they can best be classified as falling in the minimal acute food insecurity category (IPC Phase 1). In line with the large harvest and increasing household food stocks, the price of maize remains mostly stable and has declined in some cases, along with market demand. This is even the case in districts impacted by the adverse rainfall (see Figure 5). Most markets in both rural and urban areas continue to be adequately supplied with staple foods. Areas in the northern half have a more than adequate food supply as a result of good rainfall almost throughout the entire production season.  Poorer households experienced a significant reduction of yields and harvest in the areas most affected by the prolonged dry spells (such as parts of the Gwembe valley, Luangwa, Kazungula and Sesheke).  Subsequently poorer households in these areas will remain dependent on markets to supplement their food consumption. In previous years, maize from neighboring communities and districts as well as community sales by the Food Reserve Agency (FRA) has kept these deficit areas supplied with staple food for sale. Poorer households are receiving income and or food through agricultural labor sale (harvesting), and engagement in off season activities in order to meet basic food needs.

The acute food security situation in these deficit areas is currently stable. There is currently peak labor demand for harvesting and by early June the season will be over and food supplies and availability will be at their highest at the household level.

The FRA has announced its plan to purchase a maximum of 500,000 MT of maize for strategic reserves from the small scale farmers during the June to October 2012 period. The balance of the marketable surplus is expected to be purchased by the private sector for local sales and export. During the previous marketing season, the FRA bought up to 1.75 million MT from the small scale farmers while offering prices above the market value (up to 40% above) and crowding out the private sector from active market participation. Consecutive years of large purchases indicate that most of the maize was and still is in the hands of the FRA. Issues raised during the previous marketing season concerning inadequate and safe storage remain a concern this marketing season.

The FRA has an estimated 500,000 MT of maize stocks after having sold part of the purchased stocks locally and exporting about 500,000 MT in the region. Some loss was experienced due to poor storage, leading to spoilage. Currently, the FRA is still selling last season’s maize at fixed prices ranging from $140/MT to $170/MT to create room for storage of the new harvest. In addition to this, the FRA has signed a 300,000 MT sales contract with a Zimbabwean company for the export of maize to that country. While the FRA will provide maize to market dependent households through May, it has been recommended that they withdraw from maize sales once the new harvest reaches the market in an effort to spur private sector participation.  

On the other hand, informal maize trade has slowed down seasonally. The low volumes recorded for both exports and imports in recent months are typical for this time of the year due to declining stocks. The unusually steep increase in maize imports during the June to November period was attributed to the attractive prices offered by the FRA. These high prices encouraged traders to purchase maize in neighboring countries for resale to the FRA. Since December maize exports have surpassed maize imports as is the norm during a surplus season (Figure 6). The export volumes are expected to increase as the 2012/13 marketing season gets underway.

After taking strategic reserves into account, the estimated reduced maize surplus attained this season by both Malawi (approx 567,000 MT) and South Africa (approx 498,000 MT) might provide Zambia with an opportunity to increase its export market share in the Southern Africa region. This will be dependent on the implementation of an aggressive maize export plan which should also take into account improving storage facilities. The fact that Zimbabwe does not accept GMO maize, coupled with the continued maize export ban in Malawi, puts Zambia at a distinct regional advantage. Furthermore, the World Food Program (WFP) will likely be looking for regional maize to fill gaps in possible pipeline breaks for neighboring countries during the May to September period.

Between July and September, favorable food security conditions are expected to prevail throughout most of the country as household food stock levels improve in most rural areas and food stuffs reach markets. Poor households in the marginal areas in the south that experienced a reduced harvest are expected to depend on the markets to meet their basic foods earlier than usual. The better off are expected to adequately manage without any assistance through income from cotton sale, increased sale of small livestock and other livelihood strategies.  The poor who normally only meet 40-50 percent of their food needs from own production are expected to meet food consumption needs by reducing expenditures on non-essentials, increasing wild food collection, and through labor sale. Since the production in neighboring districts in the south has been only moderately affected there will be labor opportunities (both cash and in-kind) in these areas.  The extent to which these households adjust their livelihood strategies will be fully established once the results of the recently completed vulnerability assessment have been finalized. These results will also inform decision makers on what support if any would be required in the southern region. In general acute food insecurity is expected to remain minimal (IPC Phase 1) during this period.