Mozambique

Flood impact on southern Africa maize production and prices appears minimal

Format
Analysis
Source
Posted
Originally published
The severe floods lashing Southern Africa over the past six weeks have had localized impacts on some markets in Mozambique, but no discernable regional effect on white maize prices or price expectations.

Prepared by TradeInfo-Africa, tradeinfo-africa@bigfoot.com

Technical support for the establishment of TradeInfo-Africa is provided by USAID's Food Security II (Michigan State University) project and the European Commission's Food Security Network (Resal). USAID's FEWS office in Malawi has also provided assistance. Nevertheless, this document does not necessarily reflect the official views of either USAID or the European Commission.

March 31, 2000 - The severe floods lashing Southern Africa over the past six weeks have had localized impacts on some markets in Mozambique, but no discernable regional effect on white maize prices or price expectations. In fact, prices for May, July, and September delivery on SAFEX in South Africa have declined by US$7-12 since our last Monthly Update, reflecting continuing expectations of a good maize harvest in that country.

In Mozambique, the floods have created localized maize shortages in Maxixe and other southern markets, and have wiped-out the market in Xai-Xai. In Maputo, however, prices fell slightly from last month and remain below last year's levels. Prices in the Center and North remained stable or fell slightly. Roads connecting the South to the Center have been cut again by renewed flooding, just as the harvest from the Center is set to begin. If these links are not quickly repaired, farmers in the Center can expect extremely depressed prices, while consumers in southern urban centers outside Maputo may face prices well above last year's levels. Maputo is likely to be supplied with maize and maize meal from South Africa. In northern Mozambique, farmers and traders face a crisis, holding stocks of at least 50,000 MT of maize in the face of an expected good harvest coming to market in a month to six weeks. Discussions are taking place with donors to use these stocks for the food aid needs created by the floods in the South.

The Zambia National Farmers Union has estimated that 54,000 MT of white maize from large commercial farms will be marketable before the end of May. Two thousand MT will available during March, 20,000 MT during April and 32,000 MT during May, which is when he harvest begins for small and medium scale farmers. This news has taken pressure off the Food Reserve Agency, who have now advised Government that the country will not experience a late-season maize deficit, and to waive import duties on maize and mealie meal for a limited period. Total maize stocks are approximately 131,000 MT, including the 54,000 MT of early maize.

Into-mill prices of maize grain (white) in Lusaka are US$ 170-175 for bulk deliveries; smaller lots fetch US$ 160 and above. These prices are well below the import parity price from South Africa landed Lusaka (US$ 210-220/MT).

Crops are generally in good condition. Most maize is at grain filling stage, while early planted maize is nearly ready for harvest. Due to the opening of the spillway gates of the Kariba Dam some of the cultivated fields have been submerged in water in Monze, Kafue and Luangwa Districts.

Retail maize prices in Malawi declined in the south and centre in February. In all regions prices remain well below last year's. The declining prices are attributed to farmers and some traders releasing maize on the market after concluding that the 1999/2000 would not be as bad as had appeared. In some parts of the south, maize from Mozambique has started trickling in while across the country farmers have started harvesting winter maize. With harvesting period just a few weeks away in the south and some parts of the centre, maize retail prices are expected to remain stable.