The 2006/07 production season has ended. Most parts of Zambia received normal to above normal-rainfall, and an average to above-average harvest is likely. Flooding caused by heavy rainfall in some areas and an extended dry spell in others threaten local crop production, however. The impact of the adverse rainfall on food security during the 2007/08 consumption season will be established through the in-depth assessment to be conducted by the Vulnerability Assessment Committee (VAC) in May. In-country stocks in the 2007/08 marketing season will likely be adequate to meet any food aid needs that may arise.

Currently, food security continues to be stable in many parts of the country, with localized problems in the areas impacted by severe floods and deficit rainfall. As the 2006/07 marketing season ended, maize prices remained below the five-year average, and prices peaked at relatively low levels. The relatively low prices of maize have enabled adequate staple food access for most households.

Seasonal calendar

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The 2006/07 agricultural season ends

Figure 1. April rainfall anomaly, in mm FULL-SIZE IMAGE Source: USGS

The 2006/07 production season ended in April, with normal to above-normal cumulative rainfall received in most parts of the country from October through April. Below-normal rainfall was limited to the extreme southern parts of the country, which were affected by prolonged dry spells in the second half of the season.

During the month of April, rainfall performance was normal in most of Zambia (figure 1). However, the extreme south received above-normal rains, and parts of northern Zambia received below-normal rainfall. The below-normal rainfall is not expected to negatively impact crop performance in the north, as the crop is already mature. In the southern areas, which were impacted by prolonged dry spells in the second half of the season, the rain came too late to reverse the damage already done to crops.

As a result, seasonal production in the extreme south is expected to be below average. Nationally, the excessive rainfall on one hand and prolonged dry spell on the other have negatively impacted crop yields, but overall output will also be influenced by the increased planting levels with respect to the previous season. A normal to above-normal harvest is likely at the national level, but official production estimates will only be available once the crop estimate exercise is completed and results have been released in mid-June.

Food security situation

Figure 2. Estimated food security conditions, March/April 2007 FULL-SIZE IMAGE   Source: FEWSNET

Food security continued to be generally stable in April, with localized problems resulting from floods. The 2006/07 marketing/consumption season ended with generally stable supply of staple foods on the market at relatively low prices. In the coming months, Zambia will face the effects of both floods and deficit rainfall as a result of the mixed rainfall performance during the 2006/07 season, in which many parts of the country received excessive rainfall and parts of the south had prolonged dry spells.

In March, 41 districts were found to be impacted by floods. Parts of western, central and extreme eastern Zambia were moderately food insecure as a result (figure 2), but only localized parts of 17 districts required immediate food assistance during the March and April period. During this time, many households were still accessing food from the previous season’s production, and all other districts were able to access food through the end of the 2006/07 marketing year in April without external assistance. The prices of staple foods have been well below normal, ensuring good access for most households. These low prices and good availability are likely due to a high supply of the maize on the market from the surplus 2005/06 production.

When the new harvest reaches the market in May, staple food prices are expected to decrease even more, further improving food access for market-dependant households. Some of the households impacted by floods and the dry spell will be able to cope for a few months by consuming the harvest they are able to salvage.

Figure 3. Worst-case estimated food security scenario, from July 2007 FULL-SIZE IMAGE   Source: FEWSNET

However, the situation will likely deteriorate somewhat later in the 2007/08 marketing season, as those households that have been seriously impacted by the floods and the prolonged dry spell begin experiencing food access problems earlier than normal. The major food problems are likely to begin in August or September, when affected households exhaust their already reduced harvest and earnings. All flood-impacted areas will be revisited by the VAC in May, when an in-depth food security assessment is to be conducted to determine the situation after the harvest period. The results of the assessment are expected in the third week of June. However, in-country stocks will likely be adequate to cater for any food assistance requirements that will arise. Additionally, in flood-affected areas, opportunities for recession cropping will ensure a new harvest in December/January that will enable households to cope with minimal external assistance.

Markets and prices

Maize prices reached their seasonal peak in most markets in February and March at below-average levels, due to the high supply of the commodity on the market.

Of the 54 percent of districts monitored, all high-producing districts with the exception of Kaoma (Western Province) exhibited relatively stable maize prices between December and April. Steady price increases were noted in the low-producing areas, but these prices were still lower than normal (figure 4). In the case of Kaoma, maize prices were steadily increasing from August to February. This difference between Kaoma and other high-producing areas could be an indication of unusually high demand from neighboring districts in Western Province. Despite this, maize prices were still significantly below the five-year average until April, suggesting relatively good supply for the district (figure 5).

Compared to the last four years, the 2006/07 seasonal maize price peak in Lusaka is much lower (figure 6). In all the marketing years under reference except for 2002/03, maize peaked around February/March, as is normal. The 2002/03 season was a deficit marketing season, and a combination of mixed market signals from the government and late planning for imports had a significant impact on the market. The formal maize imports only started arriving towards the end of the marketing season, increasing supply and therefore pushing prices significantly down in the February/March period.

Figure 4. Nominal retail maize prices for selected districts FULL-SIZE IMAGE Source: FEWS NET/CSO

Figure 5. Real retail 2006/07 maize prices vs. average- Kaoma   FULL-SIZE IMAGE Source: FEWS NET/CSO

Figure 6. Lusaka Real Maize Price Trend (2002/3 to 2006/7)   FULL-SIZE IMAGE Source : FEWS NET/CSO

In the worst-case scenario, most of western and parts of eastern and central Zambia would become highly food insecure during the 2007/08 consumption season (figure 3). This scenario is based on the assumption that the excessive rainfall during the 2006/07 production season will severely reduce crop yields and income to a level where many households will not be able to adequately cope for the full duration of the season. Additionally, the prolonged dry spell could also result in a significant reduction in crop output in the south, especially in the already low-producing areas, making them highly food insecure. However, given initial rough estimates of the impact of the floods and dry spell, this situation is not likely.

Maize prices are expected to decrease beyond their already low levels in the coming months as demand for the commodity continues to be relatively low. In addition, the market is already adequately supplied by last season’s stocks, and the new harvest that will begin to enter the market in May will dampen prices further as a maize export ban is in place.

The Food Reserve Agency (FRA) has announced its 2007 maize purchasing plans. The agency will start the purchasing exercise on June 1 and end September 30, as in previous years. The target is to purchase 400,000MT of maize, 2,400MT of cassava, 1,200MT of rice, 1,200MT of soybeans and 1,200MT of groundnuts. The recommended floor price at which the FRA will be buying maize is comparable to last season, at K760,000/MT (approximately US$185/MT). This will provide an immediate market for farmers at reasonable prices early in the marketing season, and the large purchases could help push prices up from their current low levels to the advantage of farmers if the program effectively starts on time. During the 2006/07 marketing season, which was a surplus year, the FRA purchased 387,000MT of maize. The level of planned purchases by the FRA demonstrates confidence that Zambia will produce another relatively large maize output from the 2006/07 production, despite the impacts of adverse rainfall.

For the 2007/08 marketing season, government will provide funds for purchasing 68 percent of the planned amounts, and the FRA will need to fund the purchasing of the remaining 32 percent.

The major challenge for the FRA during the coming marketing season will be to secure adequate amounts of good storage space. The agency still has more than 200,000MT of maize stock from last marketing season’s purchases, most of which the FRA will have to sell via local sales or exports in the first part the coming marketing season to make room for the planned new purchases of 400,000MT. The main issue they will need to grapple with is selling the commodity profitably. Already, the FRA lost a second contract for the supply of 100,000MT of maize to Zimbabwe, as the price offered by Malawi was more competitive (24 percent cheaper).