The Government of Zimbabwe has made an official appeal for 600,000 MT of maize to the United Nations, representing 100% of the government's estimated maize deficit for the 2003/04 marketing year.
The supply of major staple cereals (maize, sorghum, millet) continues to improve as the 2002/2003 harvest continues to reach the market.
Bread, cooking oil and milk supplies continue to improve in most major markets throughout the country, but their prices are prohibitive for most poor people.
Consumers are still dependent on the highly priced parallel market for their supply of maize meal and sugar.
The government-stipulated minimum wage for industrial and commercial workers remains at about Z$50,000 per month, covering just 28 percent of the estimated cost of a minimum expenditure basket for a low income urban household of six in June 2003.
The year on year inflation for June 2003 was estimated at 364.5 percent, 64.4 percentage points higher than the May 2003 rate of 300.1 percent. Annual food inflation for June 2003 was estimated at 434 percent, gaining 99.4 percentage points on the May 2003 rate of 334.6 percent. Market access to food is increasingly becoming the major constraint to food security.
Since 1 April 2003, only 187,000 MT of staple cereals have been imported into the country. This represents just 18 percent of the current marketing year's cereal gap.
The 2003/2004 marketing year is projected to close with a staple cereal deficit of 844,269 MT if no further imports are made.
If and when outstanding cereal imports (estimated at 400,000 MT) are made by both the government and the humanitarian agencies, the projected total cereal deficit will be reduced to 444,000 MT.
1. Current Food Security Situation
1.1. Diminishing Food Security Crisis
Staple cereal supplies are stable in the northern and central districts of the country, where some harvest, albeit a below normal one, was obtained in the recent 2002/2003 season. Grain prices in these areas have remained relatively unchanged since last month. Despite the government's tightening control over maize grain movement and marketing, sales to urban centers such as Harare, Mutare, Bulawayo and Masvingo continue. In Harare's Mbare Musika market, the price of maize remains unchanged from last month's Z$166/kg, although it has risen to Z$222/kg in the high density suburbs. Cooking oil, milk and salt supplies also continue to be stable.
1.2. Continuing Food Security Crisis
Staple cereal supplies in the southern districts remain critically low, and prices are, as a result, relatively higher than elsewhere in the country. As food aid is scaled back, the majority of households in these districts are left to depend on the relatively expensive parallel market and irregular supplies from the Grain Marketing Board (GMB), whose prices have increased to Z$264/kg from the heavily subsidised Z$14/kg early this month. Sugar is still unavailable on the formal market; however, there are erratic supplies of maize meal and the bread supply improved temporarily, at least in Harare, where in mid-July the Bakers Association unilaterally increased its prices to Z$1,000/loaf from the control price of Z$250/loaf. The Bakers Association cited as reasons for this price hike the fact that 1. fuel procured on the black market is more than seven times its controlled price and 2. the GMB recently increased the price of wheat over 1,000%, from Z$30,100 to Z$366,584 per MT, making producer costs unaffordable at the controlled price. The improved bread supply vanished overnight when the government enforced the price controls with strong measures, including the arrests of some major bakers and the imposition of heavy fines for overcharging and profiteering.
Annualized inflation continued rising this month, further reducing households' access to food. Some economists already fear that most poor households are being priced out of the food market. The general year on year inflation rate for June 2003 was estimated at 364.5 percent, 64.4 percentage points higher than the May 2003 rate of 300.1 percent (Figure 1). Annual food inflation for June 2003 was estimated at 434 percent, gaining 99.4 percentage points on the May 2003 rate of 334.6 percent. Market access to food is increasingly becoming the major constraint to food security.
Figure 1: Trends in Annual Inflation
The Zimbabwe Vulnerability Assessment Committee (ZIMVAC) estimates that the food insecure rural population will increase to 2.2 million between July and September 2003. This is the same period in which the food aid pipeline is expected to dry up. Unless the response to the UN Consolidated Appeal is extremely rapid, and food can be obtained quickly from South Africa, where an estimated maize surplus of about 3.76 million MT exists, the chances of a food aid pipeline break are very high.
1.3. Emerging Food Security Crisis
Food security conditions in Zimbabwe have the potential to remain critical for the foreseeable future as a number of factors will continue affecting the agricultural industry and hence the country's capacity to produce food and foreign currency for importing the food. The following factors are likely to undermine agricultural production in the coming seasons: a) shortages of seed and fertilizers in 2003/04 season; b) availability of diesel which, having already affected the winter wheat land preparation, is likely to limit both summer crop land preparation and winter wheat harvesting; c) continued shortage of foreign currency, which will constrain the importation of inputs and spares; d) the high cost of seed and fertilizers, which may mean an increase in the use of retained seed and reduced fertilizer use; e) limited money in circulation and availability of loans, which may undermine the financing of agricultural production; f) the high interest rate compared to the price of maize and wheat, which will create a production disincentive; and g) limited access to credit due to a lack of collateral for the majority of resettled farmers. If these factors are not addressed, they will continue to have an influence on production in the coming years.
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