South Africa is projected to experience a shortage in maize output following the drought. Furthermore, supplies of the staple maize are anticipated to decline to their lowest level this month. Fortunately, the country’s stocks are set to satisfy needs in grain-deficit countries for the remainder of the 2018/19 farming season.
On the other hand, South Africa’s exports to the international market will likely decline in the coming months due to less competitive prices. This is according to the Famine Early Warning System Network (FEWS NET) after year another unfavorable farming season mostly due to erratic rains.
The positive developments come despite South Africa expecting below-average maize harvests alongside Zambia and Zimbabwe. According to FEW NET, maize supplies in the region were falling seasonally on major markets in the region as the lean season peaked.
FEW NET reported export similarity prices for white maize grain increased marginally in January and were 55% above their year-earlier levels. At between US $0.20 and 0.22 per kg, the competitiveness of South Africa’s white and yellow maize grain prices weakened against US and Argentinean prices that were trending at US $0.17.
Locally, maize grain prices were stable in Zambia and Tanzania while increasing rapidly in Malawi and Zimbabwe as supplies dwindled. In Zimbabwe, maize grain prices increased by up to 87% and were respectively 197 and 155% above their 2018- and five-year average levels. This has been partly attributed to ongoing fiscal and monetary challenges.
In Malawi, maize grain prices increased by up to 31% as market supplied declined sharply. In Mozambique, maize prices were increased by up to 44% and were above levels recorded a year earlier.
Tanzania has ample supplies compared to previous seasons.