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Zambia to export a third of its Maize

ZAMBIA plans to sell as much as a third of its record maize crop as drought and floods in neighbouring nations decimate harvests of the grain used as a staple food.

The country would sell as much as 1 million tons of its white maize surplus, Agriculture Minister Given Lubinda said. The government had set aside almost one-third of its record 3.2 million-ton 2014 crop to sell locally and to neighbours, he said.

Lubinda had held talks with its southern neighbour Zimbabwe over a possible sale, he said late last week, declining to stipulate how much it might buy. “I’m hoping very much that all of it will go to exports because the quantity we’re sitting on now, about 1.4 million tons, is much more than we require for local consumption.”

The worst drought since 1992 in South Africa, the continent’s biggest maize producer and traditional supplier of its neighbours, has damaged plants, with the nation predicting a 32 percent drop in the 2015 harvest to the smallest in eight years.

Botswana said crops were showing signs of “total failure” due to below-average rainfall, while floods in Malawi and Mozambique had curbed production.

Grain SA, the largest representative of cereal crop farmers in South Africa, expected the country to have a surplus of at least 100 000 tons of white maize, enough to meet the needs of the country and neighbouring Botswana, Lesotho, Namibia and Swaziland until the new harvest started in May 2016, chief executive Jannie de Villiers said last week.

Zambia had supplied Zimbabwe with maize in recent years, he said.

Extra demand

Any extra demand by Zimbabwe would imperil the supply balance, said Wandile Sihlobo, an economist at the South African grain organisation.

“There’s going to be more pressure on the demand side because Malawi serves a number of countries,” Sihlobo said.

Zimbabwe has bought 56 997 tons of white maize from South Africa since the start of the marketing year in May last year, or 12 percent of the country’s exports, data from the SA Grain Information Service shows. In the previous year, Zimbabwe purchased 28 percent of the total.

Zambia’s government would export maize for prices ranging from $195 (R2 338) to $240 a ton, Lubinda said.

White maize in South Africa has surged 28 percent this year and was at R2 755 a ton yesterday morning.

Maize on the Chicago Board of Trade has fallen 2.4 percent to $3.875 a bushel, or the equivalent of $153 a ton. Transport costs would increase the price of imports from the US to land-locked Zimbabwe.

Higher exports would also cut the cost of reintroducing a maize subsidy for local consumers, Lubinda said.

 

Source – Bloomberg