In line with seasonal trends, national average maize prices have been increasing across the region. South Africa, the region’s largest maize producer/supplier, is seeing an uptick in prices partly due to lower than expected planting and the possibility of a poor 2018/19 harvest.
Markets in Zambia continue to experience higher than usual maize prices, and in December 2018, the national average maize price was 10 percent above the 5 year average (5YA).
Zimbabwe’s inflation rate continued to surge, and in December 2018 it reached 42 percent. Inflation rates are likely to rise again following fuel price hikes in January. Close monitoring of the situation will be needed.
International Staple Food Prices
The FAO Food Price Index (FFPI) averaged 161.7 points in December 2018, nearly unchanged from its November value as lower dairy and sugar quotations were largely offset by firmer cereal prices and somewhat higher prices of meat and oils. For the whole of 2018, the FFPI averaged 168.4 points, down 3.5 percent from 2017 and almost 27 percent below the highest level of 230 points reached in 2011. Sugar values dropped the most in 2018, with also vegetable oil, meat and dairy prices registering year-on-year decreases. However, international prices of all major cereals rose in 2018.
The FAO Cereal Price Index averaged 167.1 points in December, 3.0 points (1.8 percent) higher than in November and 9.6 percent above December 2017. Wheat prices were up slightly in December, mostly supported by harvesting concerns in Argentina due to untimely rains and tightening export supplies in the Russian Federation.
However, strong competition for exports limited the rise in prices. International maize prices also rose in December, amid firm global demand coupled with weather concerns in the southern hemisphere. By contrast, international rice prices subsided for the sixth successive month, pressured further by a quiet pace of trade. Over the whole of 2018, the FAO Cereal Price Index averaged just over 165 points, some 9.0 percent higher than in 2017 but still 31 percent below its peak reached in 2011. Falling world output of wheat and maize contributed to the increase in prices during 2018, although overall global supplies of all the major cereals remained more than sufficient, leaving inventories still at high levels.