Households in most parts of Zambia are currently able to access sufficient food as a result of wide food availability and below-average prices. Food security is expected to remain favorable throughout the 2007/08 marketing season as a result of large carry-over stocks and the anticipated good 2006/07 harvest. Conversely, the initial relief efforts for households impacted by floods in February has been slow and lacking resources, and an ongoing full impact assessment of the floods and prolonged dry spell in February and March will establish the total affected population and actual needs for this consumption year. The good national staple food supply will facilitate the response to localized food insecurity, and market analysis of response options will be needed to prevent prices from decreasing beyond their already low levels.

The current below-average prices favor households that rely on the market for their food, but small-scale producers who have limited bargaining power face limited earnings as they sell their harvest. To support these earnings, the Zambian Food Reserve Agency will initiate a substantial maize purchasing program on June 1. If the program is inefficiently managed – or if the maize export ban is retained – prices are likely to remain much below average, to the detriment of small-scale farming households.

Seasonal calendar

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Food security situation

The 2007/08 marketing/consumption season has started well, with relatively stable food security. Most households are expected to remain generally food secure during the 2007/08 consumption season, due to exceptionally large carry-over stocks from the previous marketing season and the expectations that Zambia has produced an above-normal harvest (official crop estimates are expected mid-June). However, pockets of food insecurity are likely in areas where floods and prolonged dry spells during February and March had significant negative impacts on household livelihoods.

The Vulnerability Assessment Committee (VAC) has started assessing the impact of the floods and prolonged dry spell that occurred in February and March on the livelihoods of the affected population in 45 districts country-wide. This is a follow-up to the rapid flood impact assessment conducted at the end of February and early March, which established that the greatest impacts at that time were on infrastructure and an increased high risk of waterborne disease outbreak. The impact then on food access was less significant, but the situation may have since changed. The VAC assessment will establish if the impact on food access has increased since the rapid assessment, and the outcome will form the basis for appropriate responses where any additional intervention may be needed. The assessment results are expected by late July.

The initial distribution of food aid to 17 districts established to be in need of food assistance by the rapid flood impact assessment started late and has been slower than expected. The VAC recommended that relief start in March in the 17 districts (mostly in the western and northwestern provinces), but the food distribution did not effectively start until April. The Disaster Management and Mitigation Unit (DMMU) has had insufficient food to distribute – despite adequate in-country stocks – as a result of inadequate funding of the relief exercise. The distribution of relief food has also been disproportionate to the local needs per district (Figure 1). Flood-affected households may still be managing to cope, but the degree of coping will depend on the extent to which their livelihoods have been disrupted. In many areas, though, water has receded, which has improved physical access to markets and other facilities.

Once the VAC establishes the needs for the flood and dry-spell response, response strategies need to be designed that do not disrupt markets, given the relatively good supply of staple food in most parts of the country following the harvest. In areas where food is available on the market, relief measures should facilitate households accessing that food from the market. This will prevent food aid from flooding local markets, thereby pushing market prices further below their already below-average levels to the detriment of producer incomes.

Figure 1. Government relief food distributed in response to the flood impact vs. the amount recommended FULL-SIZE IMAGE Source: VAC, DMMU

Market supply and maize prices

The market continues to be well supplied with carryover maize stocks from the 2006/07 marketing season. Generally, maize prices in May decreased seasonably from April following the harvest of the 2006/07 crop and are below the five-year average. Figure 2 shows price levels for markets in high-producing districts (Choma and Kaoma), low-producing districts (Mongu and Luangwa) and the major urban center (Lusaka).

The Zambia Food Reserve Agency (FRA) will start its 2007/08 purchase program on June 1. To increase program efficiency, more buying locations have been established with respect to the last season. The agency‘s target is to purchase 400,00MT of maize, which is substantial compared to other years (although similar to last season), and shows the agency’s confidence that Zambia has produced a surplus. At the provincial level, the FRA intends to purchase similar quantities as in the previous season. The quantity of maize to be purchased from Northern Province is equivalent to those of Southern and Central provinces, even though Northern Province comparatively produces much less maize. Part of the maize that has been purchased from that province in the past has been informally imported from Tanzania. With the good harvest expected in southern Tanzania following a favorable season, the desired amount of maize can be purchased as prices in southern Tanzania are likely to be relatively low, enabling small-scale Zambian traders to increase informal imports from Tanzania and make a profit selling to the FRA.

Figure 2. Real retail maize prices for 2006/07, 2007/8 marketing years and the five-year average FULL-SIZE IMAGE Source: FEWS NET/CSO

Figure 3. Nominal maize retail prices in provincial centers vs. FRA prices FULL-SIZE IMAGE Source: FEWS NET/CSO

In May, retail maize prices in 80 percent of monitored districts were below the FRA-recommended floor price of K760/kg (~US$0.19/kg); prices in these monitored areas ranged from K450/kg (US$0.11) to K700/kg (US$0.18). Figure 3 shows comparative maize retail prices for provincial centers and the FRA-indicative floor price. The below-average prices reflect the good maize supply. The prices are expected to remain relatively low at least through July. At that time, the large purchases by FRA in the coming months could increase prices, benefiting most producing households and enabling them to meet their non-food needs. For prices to increase, the FRA purchase program needs to be effectively implemented as an alternative competitive market for small-scale producers.

If maize prices do not begin to increase in the coming months, the low staple food prices will favor households that rely on the market for food, especially urban households. Producer households only start relying on markets much later in the season when their stocks are depleted, especially low producing ones such as those in valley areas. During the last marketing season, the FRA purchase program did not have a significant impact on maize prices until August, when prices did stabilize following large market purchases once government funding for the agency increased. Before August, prices were decreasing, as the purchase program initially had inadequate funding to run effectively. If funds for the purchasing program this year are delayed again, a similar situation is likely, where the program fails to have a positive impact on small-scale producer earnings early in the season.

Another factor that could keep prices low is the maize export ban currently in place. In March, the government temporarily suspended the export ban to allow the private sector to export up to 15,000 MT of maize and 25,000 MT of maize meal. Of the 15,00MT commercial maize export, 3,048MT have so far been exported to South Africa (according to SAGIS), and a good part of the maize grain and meal has likely been exported to the DRC. Informally, maize grain and meal exports to DRC have substantially increased, with maize meal exports surpassing maize grain. In April, at least 3,774MT were exported to DRC, greater than the exports in April during the past two years. The government intends to revisit the maize export policy once the crop estimate figures have been released, and it has assurance that the country has an exportable surplus. The crop estimates figures are expected to be released by mid-June.