Maize grain demand and retail prices atypically high in southern areas

• Acute food insecurity is currently Minimal (IPC Phase 1) in most northern areas and expected to continue through September. However, in the south, where drought-affected households are currently Stressed (IPC Phase 2), the situation is expected to deteriorate to Crisis (IPC Phase 3) between July and September.

• Most poor and very poor households in the southern parts of the country (Matebeleland North and South, Masvingo, southern parts of Midlands, and Manicaland Provinces) are relying exclusively on cereal purchases. Maize grain availability in the southern districts is low in most markets and prices are atypically high. However, maize meal remains readily available and demand continues to increase. 

• Livelihood options in the south are limited and current household incomes are low and expected to continue deteriorating through September. The lean season is expected to start earlier than usual in all areas but particularly in the south due a very poor harvest and the general lack of livelihood options for poor and very poor households. 

• Average maize prices in June remain atypically high in the southern areas due to poor availability on the markets and long transport distances from source markets. Movement of grain from traditional surplus areas in the north is limited due to lower than usual harvests. The cheaper option of typical farmer-to-farmer maize grain sales is not available this season for households.
• In May, the average maize price in Matebeleland South ($0.57/kg) is almost 50 percent higher than retail prices in the cereal surplus provinces of Mashonaland West and Central in the north (Figure 1). The average price in Matebeleland South is 46 percent above the five-year national average. Among the eight rural provinces, average prices in the northern provinces of Mashonaland West and Central are the only prices currently below the five-year average.
• Grain millers and other private traders are reportedly importing maize grain from Zambia to supply markets in Zimbabwe. Anecdotal reports suggest that government has begun formal imports of maize grain from Zambia and that deliveries are being directed to deficit areas in the south. 
• Informal maize meal imports mainly from South Africa and partly from Botswana remain atypically high into the southern areas of the country. The Grain Millers Association of Zimbabwe has indicated that mealie meal imports constitute 55 percent of the trade in the country, and that they are undermining their operations because of lower import parity prices of the imported mealie meal brands.
• Matebeleland North has the highest average maize meal price at $0.81/kg, which is 18 percent above last year’s price ($0.65/kg). Since their source market is mainly in South Africa, this increase is partly due to the deterioration of the exchange rate between the South African Rand and the US Dollar.  
• Livelihood opportunities in the south are limited as most are typically tied to production outcomes in most areas across the country. Casual agriculture labor options are low in most areas in the south. Incomes for better-off and wealthy households, which would typically include crop sales, are low this year. This is affecting poor household income levels and access to cereals on the markets. There is little or no barter trade for grain because the majority of households harvested very little or nothing. Anecdotal reports indicate that in some communities in the south 100 percent crop write-offs were reported. 
• Currently, the very poor and poor households are coping through earlier than normal small livestock sales in order to raise incomes for cereal purchases. In some districts, engagement in gold panning and other small-scale mining activities is reportedly increasing. Petty trading is common across all age groups and among both sexes in the area as well. Some of the very poor and poor households continue to rely on remittances from mainly South Africa. However, remittance levels continue to be affected by a weakening South African Rand compared to the United States Dollar. Due to the below-average rainfall season, vegetable production and sales are limited in most communities due to the inability to access water.  
• Movements of cattle from drought-affected areas to better pasture areas are reported. Some better-off households are already purchasing livestock supplementary feeds, a development that would normally start occurring around August.

The assumptions used to develop the most likely scenario for the April to September 2015 Outlook period are still valid. A full discussion of the scenario is available in the Zimbabwe April to September 2015 Food Security Outlook. 

• Most very poor households in the northern parts of the country will likely have normal supplies of cereal from their own production through September and experience Minimal (IPC Phase 1) food insecurity outcomes. However, in the areas of concern household food security outcomes will deteriorate from the current Stressed (IPC Phase 2) to Crisis (IPC Phase 3) from July through September. These areas include: Beitbridge South Western Lowveld Communal (BSWLC) zone, including Matebeleland North and South, and Masvingo Mwenezi Middleveld Communal (MMMC) zone, which includes parts of Masvingo, Midlands, and Manicaland.
• Markets in the southern areas are likely to be undersupplied as the typical cereal trade flows from northern surplus areas will not behave normally this year due to reduced harvests in these areas. As more households in the north increase their reliance on market purchases later in the consumption year, prices are likely to increase atypically from July to September.
• Livestock conditions in the south are expected to deteriorate as pasture and water sources deplete. Poor livestock conditions will result in falling prices at a time maize grain prices are projected to be on the rise, meaning the livestock to grain terms of trade are likely to be increasingly unfavorable for very poor and poor households selling livestock to buy cereals. The poor conditions of livestock will also affect land preparations for the next cropping season for all wealth groups.