Food Prices to Escalate, As Maize Shortage Looms

Southern African households should brace for sharp increases in food prices because of the low maize harvest in drought-stricken southern Africa. Namibian households can, however, take some solace in the price drop in wheat-based food items such as pasta products and wheat flour, which come into effect next week because of buoyant wheat harvest thanks to fairly good weather in global wheat producing countries, according to Namib Mills yesterday.

Ironically, the shortage of maize always forces households to pay more for food items because maize is not only a major staple food among southern African households, but is also an input in a number of canned food items.

The effects of the price increases could be felt on common canned or processed food items such as cooking oil, soft beverages, and baking and starch items. Maize is also used as a key input in the production of red meat, chicken, eggs, and milk as well as in stock feed.

With poor maize yields expected in southern Africa, food price forecasts are not good for southern African households. “[It is] a situation that could trigger food price increases and aersely affect recent food security gains,” warned United Nations Food and Agriculture Organisation (FAO) last week.

South Africa, the region’s main maize producer and exporter, is expecting the lowest maize harvest in eight years due to drought. South Africa is projected to harvest about 9.7 million tonnes, the lowest since 2007, and 30 percent less than 2014’s harvest, according to FAO. Namibia’s harvest is also projected to be less than half 2014’s harvest of more than 70 000 tonnes.

FAO said southern Africa’s maize harvest is expected to shrink this year by some 26 percent compared to 2014’s bumper crop, pushing up prices and increasing import needs.

On the upside for Namibian consumers, one of Namibia’s largest millers, Namib Mills, yesterday announced a 10 percent decrease in wheat flour prices and a 5 percent decrease in pasta products of Pasta Polana and Pasta King, effective from May 11. “The effect of these good weather conditions is a global crop surplus of wheat. This extra supply of wheat has thus caused a significant drop in international wheat prices,” said Namib Mills, which in March hiked maize meal price by 17 percent due to low production of maize crop.

For 2015, the early production forecast for maize stands at about 21.1 million tonnes, some 15 percent lower than the average for the last five years, FAO noted.

In southern Africa, regional staple food stocks continued tightening in March as the lean season carried on. Availability remained higher than in previous years in South Africa, Zambia, Mozambique and most parts of Tanzania due to the above-average 2014 harvest, keeping staple food prices stable or only marginally increasing even though it was the peak of the lean season.

In Zimbabwe and Malawi, however, staple food prices increased significantly driven by limited supplies and the lack of green harvests, normally available starting in March, due to late start and poor quality of the current rainfall season.

“Last year, the sub-region saw a bumper harvest, which has made this year’s harvest prospects look even weaker so we have to be cautious until governments, often with the support of FAO, have completed all the assessments in the coming days. FAO is closely monitoring the situation on the ground,” said David Phiri, FAO’s Sub-regional Coordinator for Southern Africa. Malawi and Zambia, the second and third largest maize producers in the sub-region, are also expected to register smaller harvests compared to the 2014 bumper crop.

Lower maize harvests are also anticipated in Botswana, Lesotho, Madagascar, Mozambique, Swaziland and Zimbabwe. The poor outlook is already having some impact on cereal markets. South Africa recorded significant price increases in February – although the rise eased in March following improved rains.

These price increases are expected to mostly affect those countries that rely more on maize imports such as Namibia where relatively high price increases were already recorded in February.

Source : New Era