Sub-Saharan Africa’s grain prices mixed in October …but yields remain low

26.11.2018

Local prices of the staple food, maize, showed mixed trends across the Southern Africa region in the month of October.

According to the Food and Agricultural Organisation’s monthly price analysis, in South Africa, prices of maize dropped slightly with white maize moving down by 0.2 percent and yellow maize declining by 0.9 percent to R2373.66 per tonne and R2396.72 per tonne respectively.

The price change was as a result of pressure by the stronger national currency and expectations of improved plantings for the 2019 crop.

“The year-on-year contraction in the 2018 output and concerns over the occurrence of anomalously reduced rainfall later in the current season, associated with an El Niño event, limited the decline in prices and kept them above their values a year earlier,” said FAO.

An overall weak national currency and spill-over effects from the international market also contributed to the high level of prices. On the other hand, South Africa’s local prices of wheat firmed in October and were slightly above their values a year earlier, reflecting higher international prices, given the country’s dependency on imports.

The OECD-FAO Agricultural Outlook 2018-2027 report forecasts that wheat production in South Africa will decline as farmers are cutting the area dedicated to wheat  production.

“Wheat’s problem in South Africa is that in a free market environment, producers prefer to plant more profitable crops such as canola, oats, corn and soybeans,” stated the report.

In Zambia, prices of maize grain and maize products increased seasonally and were 20 percent higher than in October last year, with the seasonal increases amplified by the reduced 2018 output. In mid-October, the government imposed temporary maize export restrictions in an effort to ease pressure from foreign markets and temper domestic price rises (FPMA Food Policies <http://www.fao.org/giews/food-prices/food-policies/detail/en/c/1164115/>).

The national average price of white maize in Zambia in October was K2.02 (17 US cents) per kilogramme and breakfast maize meal was K3.30 (28 US centrs) per kg while white roller maize meal was K2.45  (21 US cents) per kg.

FAO further reported that in Malawi, prices of maize grain continued to climb, putting them at levels well above those a year earlier, mainly due to the sharp drop in the 2018 output.

Also, in Mozambique, prices of maize were reportedly higher than a year earlier. Elsewhere in the sub region, the 2018 maize output was estimated to be close to or above average.

In Namibia, prices of maize meal debilitated in October, while they remained unchanged in Eswatini in September. In these two countries, although dependent on South African grain supplies, prices were generally lower compared to their values in the corresponding month last year, mainly because of the above-average 2018 harvests.

In Zimbabwe, while prices of maize meal decreased and were lower on a yearly basis reflecting generally adequate domestic supplies, prices of wheat flour spiked in September to levels above those a year earlier.

The increase reflects higher international quotations coupled with liquidity constraints that have disrupted access to external supplies. However, the 2019 domestic wheat output is forecast to increase, and this is expected to ease the supply pressure and weigh on prices.

In Madagascar, prices of local rice strengthened seasonally in October and were close to the high levels of a year earlier due to generally tight domestic supplies despite an estimated increase in the 2018 harvest.

Despite the changes in the prices of the grains in the month of October, the outlook for Sub-Saharan Africa remains depressed as most farmers are now dedicating more land to cash crops.

The OECD-FAO 2018-2027 outlook report indicated that Sub-Saharan Africa’s total grains imports in 2018-19 are forecast by the IGC at 29.4 million tonnes, up from 27.6 million the year before with the leading importer being Nigeria, which will import 5.6 million tonnes of grain in 2018-19, up from 5.5 million.

It is followed by Kenya, which will import 3.3 million tonnes, up from 3.2 million, Sudan, which will import 2.8 million tonnes, up from 2.7 million, and South Africa, which will import an unchanged 2.1 million tonnes.


southerntimesafrica.com

Readers choice: TOP-5 articles of the month by UkrAgroConsult