Cereal prices increase in deficit districts

• Food availability and access remain stable throughout the country, but maize grain prices in the districts of concern continue to rise above the national average. In most parts of the country, household food stocks from own production are being supplemented with local market purchases in order to meet basic food needs. Maize meal is readily available in districts in the southern and western region through imports from South Africa and Zambia, but the availability of maize and other small grains is limited.

• Most households in districts that experienced significantly lower cereal production during the 2011/12 agricultural season (Matabeleland South, Masvingo and Matabeleland North provinces) began relying on market purchases for food almost immediately after the harvest period. Staple cereal prices in these districts are currently the highest in the country, ranging between $0.40-0.57/kg for districts in Gwanda, Zaka and Masvingo, compared to $0.20/kg in the surplus districts of Gowke, Seke, and Marondera. 

• World Food Program (WFP) cereal shortfalls are likely to affect the coverage of assistance programming through December 2012. Unless funding is secured soon, WFP is considering either providing half rations for the STA program in September or postponing the start of STA for the current period through October.

The assumptions for the projected food security scenario in the July outlook are still valid, with the exception of the continued availability of food assistance through December 2012. Currently in most parts of the country household food stocks from own production are being supplemented with local market purchases in order to meet basic food needs. In southern districts that experienced significantly lower cereal production during the 2011/12 season (Matabeleland North, Masvingo, Matabeleland South and the southern parts of Manicaland provinces) the majority of poor and very poor households are largely consuming locally purchased maize grain and meal.  Despite the availability of basic food stuffs in markets and the relatively stable cost of living, a proportion of poor households in Zimbabwe will continue to have challenges accessing food.

As cereal prices increase, most households in districts in Matebeleland South have almost depleted food from their own production. So while cereal is available on the market, poor households cannot afford to access this food. As a result, poor households in districts including Gwanda and Zaka have reduced the number of meals per day. Similar reports have been received in areas like Buhera and Mudzi. Districts including Beitbridge, Tsholotsho, Gwanda, Chiredzi and Mangwe have reported a slight increase in remittances which suggests that more youths are already migrating to neighboring South Africa and Botswana for employment in order to support their families back home. The typical income sources for most households in the areas of concern include casual labor, remittances and livestock sales.

Cattle prices in Zaka, Chivi and Mwenezi which normally range between $300 – 400 around this time of the year are reportedly as low as $250, which indicates distress sales of livestock. Some households reported that cattle were already being moved to farms or that owners were buying homemade hay at $5 per bundle to feed their cattle. Pasture conditions are expected to worsen further due to the high possibility of veld fire outbreaks, which are normally experienced from September to October due to human activities and the dry conditions of grasslands.

Humanitarian assistance cereal shortfalls

The earlier assumption in the July outlook on the provision of assistance by the Government of Zimbabwe and humanitarian organizations to food insecure households has been updated. Currently WFP has cereal shortfalls and this is likely to affect the coverage of Safety Net, Food for Assets and the Seasonal Targeted Assistance (STA) programs (Figure 3). Unless funding is secured soon, WFP is considering either providing half rations for the STA program in September or postponing the start of STA for the current period through October. If the pipeline deficit is not addressed in a timely manner, the food security situation in food insecure districts is likely to deteriorate through December 2012. Assuming that assistance will continue to be delayed, districts including western parts of Mashonaland West, northeastern parts of Mashonaland East and most southwestern districts of Zimbabwe will likely experience Stressed levels of food insecurity between August and September, and Crisis levels between October and December (Figures 1 and 2).

Markets and Prices

While maize meal is readily available in most markets across the country, small grains like sorghum, pearl and finger millet are becoming scarce and prices are high. Supplies from the surplus areas in the districts of Mashonaland Central and Midlands provinces are being transported to the maize deficit areas of Matebeleland North, Masvingo and Matebeleland South by private traders and the Grain Marketing Board (GMB). Cereal imports from both South Africa and Zambia have largely contributed to the steady availability of maize meal in most markets and will continue in the coming months. If no major policy changes occur that could affect imports from these two countries, the availability of basic food stuffs in markets is likely to continue up to December 2012.

Based on trends identified through the Agriculture and Food Security Monitoring System (AFSMS), the ZimVAC estimated that the national average maize grain price in the peak of the lean season will be $0.36/kg, with prices in the cereal surplus districts averaging $0.21/kg, and $0.44/kg in cereal deficit districts. Cereal prices in some affected districts have already risen above the estimated average price of $0.44/kg (Figure 4). In Gwanda, maize grain prices increased by 70 percent when comparing the July 2012 price of $0.57/kg to the price in June 2011.  This change in price is above the average prices projected by the ZimVAC.

The highest concentration of food insecure households is found in Matabeleland South, Masvingo and Matabeleland North provinces, which experienced significantly lower cereal production during the 2011/12 agricultural season. Most households began relying on market purchases for food almost immediately after the harvest. Staple cereal prices in these districts are currently the highest in the country ranging between $0.40 - 0.57/kg for districts in Gwanda, Zaka and Masvingo; compared to cereal prices in surplus districts (i.e. Gowke, Seke, and Marondera) of $0.20/kg.

The annual inflation rates measured by the Zimbabwe Statistical Agency (ZIMSTAT) show a 0.67 percent increase in the general cost of consumer goods and services between July 2011 and July 2012. While the annual rates of inflation for the first half of 2012 were approximately 4.04 percent, the Ministry of Finance has projected that 2012 annual inflation will drop to below five percent by December. The decline in the annual rate of inflation does not imply that the general prices of goods are falling but that prices will continue to increase at a much slower rate.  It is expected that prices of food commodities will not decline and poor households will still have difficulty accessing the already expensive food items. The trend in the Consumer Council of Zimbabwe (CCZ), which monitors the low income urban basket, is consistent with the observed low rates of inflation. The cost of living basket decreased by only 0.83 percent whereas the food commodity basket fell by only 3.32 percent. The decline in the basket is not significant enough for low income groups whose salaries are already below the poverty datum line of $ 567/month.