High food prices continue to affect food insecurity among poor households

• Currently, poor households in cereal deficit areas in the south western parts and isolated northern parts of the country are experiencing Stressed (IPC Phase 2) and Crisis (IPC Phase 3) acute food insecurity outcomes due to depleted stocks from harvests and high food prices at a time when income from contruction related labor, livestock sales, and self employment activities is limited. Normally households in these areas begin to deplete their own food stocks in October. 

• Maize grain and meal prices have remained relatively stable but higher than their respective 2012 prices. Current average prices are 17 to 41 percent higher in markets across the country  than their respective 2012 levels, and this is being driven by higher demand and higher transportation costs due to higher fuel costs this year in comparison to 2012. Maize grain remains limited in markets in the south western deficit areas, while maize meal is readily available. Higher than average food prices are reducing the ability for poor households to purchase adequate food to cover their needs.

• To meet national cereal requirements this consumption year, imports are necessary to cover the production shortfall. Recent imports of  163,000 MT has resulted in a slight two percent improvement of the cereal deficit, bringing it down from 695,552 MT to 681,554 MT at the end of June.  Current cereal availability covers eight months of national annual requirement, hence additional imports are required by end of November.

• Since the main harvests in April, the country is now five months into the 2013/14 consumption year. Most households harvested enough in May to only cover 2 to 4 months of their food needs, so at this point in the post-harvest period many households have run out of stock from own production,particularly in the south western parts of the country. As a result of this, most households are having to depend on market purchases to meet their food needs. Income for market purchases is earned mainly through casual labor in non-farm activities, sale of livestock, and self employment activities. However, due to limited labor and income opportunities as well as high food prices most very poor households in deficit areas are likely unable to meet their food and non-food needs without external support or atypical coping strategies.
• Fuel prices have been on the decline over recent months, which has caused inflation rates to drop by slightly more than 12 percent between April and July. However, these trends have not translated into lower maize meal and grain prices in southern districts. This could be due to trader speculation and high demand of purchased staple. Normal trends of inflation in the past four years show that fuel prices and inflation rates are relatively stable and declining between the months of June and September (Figure 3).
• Compared to this period last year, maize prices in monitored markets are considerably higher. Maize grain prices are 40 percent higher than July of last year in Bulawayo, Gweru, and Mutare, and range between 16-17 percent higher in Harare and Masvingo. Compared to this period last year, maize meal prices are approximately 18 percent higher in Masvingo and Gwanda, while they are approximately 13 and 41 percent higher in Gweru and Harare, respectively. Between April and July 2013, maize grain prices have remained stable, showing an average month-to-month decrease of 2.5 percent. On average the month-to-month decrease during this period is about 6 percent, so these higher prices could affect food access for market-dependent households in deficit areas.
• Factors that are driving prices across all marketsinclude demand for grain, higher fuel prices this year when compared to 2012, and trader behavior. These recent price trends are also indicative of this year’s reduced supply of production stocks onto the market which normally stabilizes significant price shifts.
• The current cereal shortfall for the country is estimated at 681,554 MT (or 33 percent of the national requirement) and is expected to be filled by imports (Figure 5). Current cereal availability covers eight months of the national annual requirement, hence additional imports are required by end of November. According to the Grain Millers Association, given the restrictions on Zambian grain exports, grain supplies are likely to be sourced from South Africa and Brazil.

The majority of very poor households in 17 livelihood zones[1] across Matebeleland South, Masvingo, Matebeleland North provinces, northern and southern parts of Manicaland, and southern parts of Midlands province will experience Stressed (IPC Phase 2) food insecurity outcomes between August and September as households finish their own production and begin to rely heavily on local markets for food that is being sold at prices that are higher than average. Parts of districts, including Bulilima, Mberengwa Chivi, Mwenezi, Chivi, Zaka, Chiredzi, Nkayi, Tsholotsho, Chirumanzu, Shurugwi, Bikita, Masvingo, Chimanimani, Buhera, Matobo and Zaka will likely face Crisis ( IPC Phase 3) outcomes. 

Based on FEWS NET’s price projections using fundamental analysis,  cereal prices in the deficit areas are expected to remain above the national average  and will likely increase between approximately five and eight percent during the October to December period. Incomes for cereal market purchases are likely to be affected by limited casual labor opportunities, a reduction in livestock prices due to stress sales, and the deterioration of livestock conditions due to poor pasture and access to water sources between October and November. Food insecurity outcomes in cereal deficit areas across 17 livelihood zones in the south western parts and isolated northern parts of the country  will continue to be Stressed (IPC Phase 2) and in Crisis (IPC Phase 3) during the October to December period, with slight improvements during this period due to expected improvement in labor opportunities and earnings related to the start of the next cropping season, along with the start of STA, livelihood support,  and other safety-net programming in deficit areas. However, given STA funding shortfalls and the fact that  most agencies are still at the planning and resource mobilization stage, based on the confirmed levels of funding, FEWS NET is assuming that assistance will be at approximately 60 percent of their normal levels. Most households in the deficit districts will experience Stressed (IPC Phase 2) food insecurity outcomes even in the presence of humanitarian assistance. Parts of Gwanda and Chivi will likely be in Crisis (IPC Phase 3) in the presence of limited humanitarian support during the period October to December.

Once humanitarian response planning is complete and resources are mobilized, FEWS NET anticipates that humanitarian assistance and livelihoods programming levels will be fully operational and this will likely improve food insecurity outcomes for most households in the cereal deficit areas between January and March 2014. The start of the green harvest is also expected to further improve food availability in most areas deficit areas across the country.