Maize, a staple crop in Zambia, is an important agricultural commodity, contributing significantly to the country’s economy. In this article, we will provide an update on the current situation of maize in Zambia for the 2022-2023 season.
Maize Prices
As of February 2023, maize prices in Zambia stood at $235 per ton. This represents a 25% decrease from the previous month and a 10% increase compared to the same period in 2022. The Food Reserve Agency (FRA) released stocks onto the market, which boosted the average supply and contributed to the decline in price. However, the current pricing deviates from the historical trend, as the growing season is usually accompanied by price increases due to the limited inventory available.
The increase in the price of mealie-meal (a local staple food made from maize) was a significant concern, with a 25% year-on-year increase. The FRA intervened by releasing stock, which is an indirect way to influence the price of mealie-meal by giving millers a cheaper source of grain. The FRA’s actions are consistent with government policy on maize and maize marketing. The government employs the FRA to stabilize mealie-meal prices and mitigate the negative sentiment around the current state of the economy.
Maize Production Outlook
The current maize production cycle for the 2022-2023 season is at the growth stage, with harvest expected to commence around March-April. At the current price of $235 per ton, marginal gains can be expected as harvest draws closer, but the new crop on hand is expected to exert negative price pressure.
Despite higher-than-expected rainfall, output is expected to be impacted by the poor roll-out of the Fertilizer Input Support Program (FISP). The 2022 season was characterized by a problematic tendering process for the supply and distribution of inputs. It was a learning curve for the new administration, but it could prove an expensive lesson due to the direct correlation of output and fertilizer distribution. It is widely expected that the national output will match the 2022 output of 3 million MT, which matches current national consumption for both domestic and industrial uses.
Conclusion
The Zambian government’s efforts to stabilize maize prices are more symbolic than practical. Maize doubles as an economic barometer for prevailing economic conditions in the country, and a run-away maize price would add to negative sentiments around the current state of the economy. The FRA is holding reserve stocks, and the amount of stock released between now and the expected harvest cannot be speculated. However, it will have a significant impact on pricing at harvest. Overall, the outlook for maize production in Zambia is expected to remain stable, but the poor distribution of inputs and price volatility remain significant challenges that require urgent attention.
In summary, the current situation of maize in Zambia for the 2022-2023 season indicates a decline in maize prices due to the release of reserve stocks by the Food Reserve Agency (FRA). However, the price of mealie-meal, a local staple food made from maize, has increased by 25% year-on-year. The FRA’s intervention to stabilize mealie-meal prices is consistent with government policy on maize and maize marketing. The current maize production cycle for the 2022-2023 season is at the growth stage, and marginal gains can be expected as harvest draws closer. However, the poor roll-out of the Fertilizer Input Support Program (FISP) is expected to impact output, and the national output is expected to match the 2022 output of 3 million MT, which matches current national consumption for both domestic and industrial uses. The Zambian government’s efforts to stabilize maize prices are more symbolic than practical, and the poor distribution of inputs and price volatility remain significant challenges that require urgent attention.
Resources:
FNB Zambia Agribusiness Report
