Prices remain stable but purchasing power is low for low-income households

• In northern surplus-producing areas of Zimbabwe, Minimal (IPC Phase 1) acute food insecurity outcomes are ongoing as households access food from their 2023 harvested stocks and have access to typical income-earning opportunities, along with food and cash crop sales. In the deficit-producing areas, widespread Stressed (IPC Phase 2) outcomes remain present in the post-harvest period due to limited own-produced food stocks and as the high cost of living constrains household purchasing power. In some extreme deficit-production areas in the south and other areas, household food stocks from the 2023 harvest are gradually depleting, and households are likely to begin engaging in coping strategies indicative of Crisis (IPC Phase 3) in August and September, earlier than normal. In urban areas, the high cost of living and limited access to income is making it difficult for poor households to meet their non-food needs, driving Stressed (IPC Phase 2) outcomes.
• The official and parallel market exchange rates appreciated by about 30 percent in August, supporting the general stability of ZWL prices for goods and services. In August, ZIMSTAT reported that the ZWL cost of living reduced by about 10 percent compared to July; however, the ZWL cost of living remains high for most poor rural and urban households following sustained increases over the past several months. Most poor households engaged in casual labor and petty trade are operating and earning in USD, cushioning households from the high ZWL cost of living, and continue to purchase goods from the informal markets, which retail in USD and continue to be relatively cheaper than the main formal retail shops. 
• The sale and marketing of cereal grain and other crops is ongoing on the open market, especially in surplus-producing areas, as the tobacco and cotton marketing seasons slowly tail off. In deficit-producing areas, poor households are expected to increase their engagement in off-farm activities such as petty trade, construction, the production and sale of vegetables, and artisanal mining to earn income, with the earlier than normal start of the lean season in September and October.
• Climate forecasts suggest increasing confidence in a strong El Niño by late 2023. El Niño typically leads to delayed and cumulatively below-average rainfall in Zimbabwe. Irregular rainfall will most likely negatively impact the planted area, in turn limiting the availability of agricultural labor opportunities and household access to income in late 2023 and early 2024. Livestock body conditions are also likely to decline as pasture and water diminish, especially in semi-arid areas. Close monitoring of rainfall totals and distribution will be required to assess the severity of adverse impacts on cropping conditions for the 2024 harvest. Government and other agencies should prepare for rising food assistance needs in 2024.

Most households, including poor households in surplus-producing areas, continue to access food primarily from stocks from their 2023 harvest, with some households with surplus stocks continuing to sell their grain on the open markets, including to the Grain Marketing Board (GMB). Farmers are also selling other non-staple food and cash crops for income. In these surplus areas, farmer-to-farmer grain and cash crop sales are common, and most markets are well supplied with grain. However, there are reports that some farmers might be withholding grain from the markets in anticipation of higher prices and to shore up their food stocks for the upcoming 2023/24 agricultural season, where El Niño conditions are expected to impact production negatively. 

In most deficit-producing areas in Zimbabwe, household demand and reliance on staple grain and maize meal purchased from the market is increasing as food stocks from the 2023 harvest decline. However, maize grain availability is variable across monitored markets, with some markets well supplied, while in other monitored markets, maize grain availability is erratic or unavailable, as is the case in some parts of the south. However, traditional or small grains are available for purchase in monitored markets in some typical small grain-producing areas in the country's south, west, and extreme north. 

Maize meal supplies across most monitored markets in the country are good, including remote areas where other staple grains are not typically available. At the end of May, the GMB reportedly increased maize meal production and distribution across all GMB depots countrywide, with its Silo maize meal brand also available in main retail shops at competitive prices compared to other local commercial brands. Imported maize meal brands are also available in some markets, especially in southern districts near the South African border, and usually at lower prices than local brands. However, for some low-income households, access to even the lower-priced maize meal and other commodities remains constrained due to limited access to income and low purchasing power.

Open market sales of grain, other crops, and maize meal are mainly conducted in USD in most areas, or South Africa Rand (ZAR) in the southern districts. Maize grain prices in USD remain generally stable, although prices in some surplus-producing areas are 20 to 30 percent higher than last year. Local currency (ZWL) prices of staple foods continue to follow parallel market exchange rates in informal markets. However, price volatility continued to decline in August as official and parallel market exchange rates stabilized. In formal retail supermarkets, a 10 kg bag of unrefined maize meal retails at about 26,500 ZWL (~5 USD at the prevailing official exchange rate) at the end of August, around a 30 percent decline from prices in June. In the informal markets, unrefined maize meal retails around 3.50 to 5 USD per 10 kg and generally is cheaper than in the formal retail supermarkets.

The cotton marketing season was extended to the end of August to allow all farmers to deliver their produce following the end of the typical marketing season in July. Cotton deliveries and sales in 2023 have been significantly higher than last year, with 86,000 MT delivered by mid-August, over 70 percent higher than last year. Cotton sales are an important source of income in typical cotton-producing areas, especially in the low rainfall areas. The increase in the percentage of foreign currency a farmer may receive per unit sold - the foreign currency retention rate - from 75 percent in 2022 to 85 percent in 2023, has also helped cushion farmers against ZWL price volatility. However, late payments for cotton deliveries continue to be reported, likely impacting farmers' access to income for food and non-food purchases. 

The 2023 tobacco marketing year officially ended on July 31 at the auction floors, although sales for tobacco produced under contract continue. By mid-August, around 295 million kilograms of tobacco had been sold, about 44 percent above last year's sales and reportedly a record since the cash crop started being produced in Zimbabwe over a century ago. Tobacco farmers are also receiving a 85 percent foreign currency retention rate for sales. Tobacco, a labor-intensive crop prevalent in the Mashonaland Provinces and parts of Manicaland Province, is an important source of income for farmers and farming households, particularly as it also provides agricultural labor opportunities for poor households within and around the respective tobacco-producing communities.  

The official and parallel market exchange rates remained stable in August, having appreciated around 30 percent since peaking in June (Figure 1). As of August 29, official and parallel market exchange rates were around 4,575 ZWL/USD and 6,100 ZWL/USD, respectively. The appreciation in exchange rates since July has resulted in the variable reduction in ZWL prices of some basic commodities and services by 20 to 40 percent compared to the end of June. The rate of the price decline for some commodities has been slower, prompting increased monitoring of main formal retailers by the government to ensure prices reflect the official exchange rates or are within the 10 percent maximum allowable margin above the official exchange rates. Some suppliers continue to prioritize the informal market, where transactions are exclusively in USD and cash. Additionally, USD prices of basic commodities in the informal markets remain relatively stable and lower than in formal markets. 

Following ZWL prices reducing for some goods and services in July and August, ZIMSTAT reported the ZWL cost of living in August decreased byabout 10 percent. Despite this reduction, the cost of living remains high and above what most poor households can afford, following a protracted period of increases in the ZWL cost of living. However, poor households earning in USD and ZAR remain somewhat cushioned from the high ZWL prices and volatility in the exchange rate. 

In rural areas, most poor households continue to engage in seasonal off-farm activities such as petty trade, the production, collection, and sale of vegetables and wild products (fruits, grass, firewood, fishing), brick-making, construction activities, and artisanal mining to earn income. However, household access to income remains constrained by increased competition and the general poor liquidity and low demand for products and services. Water resources are also declining in areas where the 2022/23 rainy season was cumulatively below average, especially in the typical dry areas, constraining the potential engagement levels in gardening, brick-making, construction, and other livelihood activities. Cash and in-kind remittances remain notable sources of income, particularly in the southern areas where many household members migrated to South Africa for employment opportunities. In urban areas, there is an increase in informal marketing, including vending and petty trading, in the city centers, residential areas, industrial and other areas as poor households seek to earn income to meet the high cost of living. 

Livestock body conditions, particularly cattle, are declining in some southern and drier parts of the country following the earlier-than-normal cession of rains this year, which impacted water and pasture availability. The decline in cattle body conditions is resulting in cattle prices also declining. However, goat body conditions remain fair to good, with the prices for goats and chicken remaining stable. In most high-rainfall areas, cattle body conditions remain fair to good, and livestock prices remain generally stable. Pasture conditions in these areas are also seasonally deteriorating. Across the country, livestock disease prevalence remains high due to the high cost of veterinary care. Additionally, the demand for livestock and livestock products remains below normal due to low liquidity among better-off buyers. 

In August, area-level Minimal (IPC Phase 1) acute food security outcomes are ongoing in surplus-producing areas as households continue to consume own-produced food stocks and access income from typical sources and food and cash crop sales. In deficit-producing areas, poor households currently continue to face Stressed (IPC Phase 2) outcomes as own-produced food stocks deplete and household purchasing power remains low, with area-level Crisis (IPC Phase 3) outcomes likely to emerge in the worst affected areas in August and September. In urban areas, the high cost of living and limited access to income for poor households continues to drive Stressed (IPC Phase 2) outcomes. 

The assumptions used to develop FEWS NET's most likely scenario for the Food Security Outlook for June 2023 to January 2024 remain unchanged, except for the following:

• Climate forecasts suggest increasing confidence in a strong El Niño by late 2023. El Niño typically leads to delayed and cumulatively below-average rainfall in Zimbabwe (Figure 2). 
• According to international multi-system seasonal forecasts, above-average temperatures are most likely across Zimbabwe through January 2024.
• Veld fires, which have been above normal in the last few years, are expected to increase and destroy forests, pastures, property, and infrastructure in some areas as the fire season progresses through the start of the next rainfall season. 
• The mass expatriation of Zimbabweans from South Africa is unlikely during the outlook period as the Zimbabwean Exemption Permit Visa (ZEP) expiry date has been extended through June 2024.

In August and September, most deficit-producing areas are expected to continue experiencing Stressed (IPC Phase 2) food insecurity outcomes as poor households continue to meet their food needs, but the high cost of living limits access to non-food needs. Own-produced food stocks in most of these areas are expected to continue declining and, in some cases, be exhausted as the anticipated start of the 2023/24 lean season approaches around September/October. An increasing number of households are expected to start relying on food purchases from the market, support from remittances, and engage in typical coping strategies to meet their food needs. Household purchasing power is likely to remain below average due to below-normal access to income and generally above-average prices. In areas where the 2023 harvest was particularly below-average, area-level Crisis (IPC Phase 3) outcomes in August and September are expected to emerge as households increase their employment of coping strategies indicative of Crisis (IPC Phase 3) to meet their food needs.

In surplus-producing areas with higher crop production than deficit-producing areas, Minimal (IPC Phase 1) outcomes are expected during this period. Additionally, some households in these areas are expected to continue earning income through crop sales, cash, and in-kind payments for labor and other income sources. However, most households in the lesser productive communal areas will likely deplete their own-produced stocks earlier than normal, resulting in the emergence of Stressed (IPC Phase 2) outcomes around September. 

From October 2023 to January 2024, an increasing number of poor households in deficit-producing areas will likely deplete their own-produced food stocks and increase their reliance on market purchases for food. Prices for grains are expected to rise as market demand increases and market supply reduces in some of the deficit-producing areas and more remote markets. The forecast El Niño is likely to lead to a delayed and mixed start to the 2023/2024 rainy season. Irregular rainfall will most likely negatively impact the planted area. Limited access to agricultural labor opportunities due to the impact of El Niño on the start of the 2023/24 rainy season is likely to constrain poor households’ access to an important source of income, while high food and non-food prices will keep household purchasing power lower than normal, driving Stressed (IPC Phase 2) and Crisis (IPC Phase 3) acute food insecurity outcomes. Livestock body conditions are also likely to decline as pasture and water diminish, especially in semi-arid areas, likely lowering cattle prices. 

In surplus-producing areas, the more productive resettlement areas are expected to maintain Minimal (IPC Phase 1) outcomes from October 2023 to January 2024 as poor households access food from their own-produced food stocks and earn income through crop sales and other sources. However, the communal areas in these parts of the country are expected to be Stressed (IPC Phase 2) as own-produced food stocks decline and access to income remains constrained, negatively impacting market access for poor households. However, some of the worst affected households in the communal areas may engage in coping strategies indicative of Crisis (IPC Phase 3) to minimize food consumption gaps, but the overall area classification will likely remain Stressed (IPC Phase 2). 

In urban areas, poor households are expected to remain Stressed (IPC Phase 2) through the outlook period as high competition for income-earning opportunities limits household income and high food and non-food prices constrain household purchasing power.

Recommended Citation: FEWS NET. Zimbabwe Food Security Outlook Update, August 2023: Prices remain stable but purchasing power is low for low-income households, 2023.