Maize shortages are looming across East and Southern Africa after a poor 2012/13 season and the late arrival of rains for the current season have led to a slump in production.

 

Kenya?s maize production is forecast to fall by 15%, to 33.9mn 60 -kg bags, well short of domestic demand of 40mn bags, after erratic rains and an outbreak of lethal necrosis disease which destroyed 26,000 ha of maize.

 

Zimbabwe?s maize crisis is even more severe, with an estimated shortfall of over 1mn MT. The slump in production has come at an awkward time as the region?s two surplus exporters ? Zambia and Malawi ? have imposed restrictions on maize exports in order to shore up their own stocks.

 

Zambia?s production fell by 11% in 2012/13, to 2.5mn MT, under the impact of poor weather and cuts in the provision of subsidised fertiliser, and the late arrival of seasonal rains has delayed planting for the current season. Although the government has promised to keep to its commitment to export 150,000 MT of maize to Zimbabwe to boost emergency stocks, it is unlikely to authorise further exports.

 

This will force deficit countries in the region to turn to the international market, at a substantially higher cost.

 

Grains price outlook

Grain prices had another mixed month in October, with Wheat rising by a marginal 1.2% to end the month at US$329/MT, while Maize fell by a further 2.7% to US$214/MT, and Rice fell by 2.2% to US$451/MT.

Wheat prices have been buoyed by concerns over the crops in the Black Sea, Australia and Argentina, while Maize has fallen to its lowest level in three years on the back of surging global supplies and stocks.

Going forward, Maize price weakness is likely to continue as a strong global crop is in prospect, Wheat is likely to be stable while concerns over the global crop continue, while the outlook for Rice is bearish as the Thai government prepares to release substantial stocks onto the world market.

Source: Ecobank Research

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