15 July 2024
The Southern African region continues to face climate-related challenges that place its agricultural sector and food supply at risk. The mid-summer drought of 2024 has devasted the regional maize supplies, a staple food crop for the region. So far, the focus has been on the losses farmers are experiencing, but soon, consumer pressures will arise.
At the end of February 2024, Zambian President, Mr Hakainde Hichilema, declared a disaster after realizing the country had lost over half of its maize harvest because of the drought. Zambia's maize production in the 2023-24 season is down by over 50% to an estimated harvest of 1,6 million tonnes. The country now finds itself in a position where it has to import a record volume of one million tonnes to satisfy the domestic maize needs of 2,8 million tonnes.
Zimbabwe faces a similar challenge, with maize harvest down roughly 60% from the 2022-23 production season to an estimated 635,000 tonnes. This is the lowest harvest since the 2015-16 production season, another drought year. Moreover, the drought is not the only reason for the fall in Zimbabwe's maize harvest; although a significant factor, the decline in fertilizer usage has also contributed to poor yields. The fertilizer prices, while down from the previous year, are remarkably above the pre-COVID-19 levels, thus adding financial strain on poor smallholder farmers, the majority of producers in Zimbabwe. The fertilizer makes up roughly a third of the grain farmers' input costs.
This significant decline in Zimbabwe's maize production means that the import needs will increase sharply. Zimbabwe's domestic maize consumption is typically at about two million tonnes. Thus, the United States Department of Agriculture's Pretoria-based analysts estimate that Zimbabwe may need to import at least a million tonnes in the new marketing year of 2024-25 is convincing (the 2024-25 marketing year corresponds with the 2023-24 production season). Such an import figure is a significant increase from Zimbabwe's maize imports of 637,327 tonnes in the 2023-24 marketing year, all from South Africa.
Unlike the 2023-24 marketing year, where South Africa's overall maize exports were 3,4 million tonnes, in the new 2024-25 marketing year, South Africa's maize exports will likely fall to 1,4 million tonnes. This is on the back of a poor domestic harvest. South Africa's maize harvest is down 19% year-on-year, estimated at 13,3 million tonnes, because of the mid-summer drought.
Admittedly, South Africa did not experience a sharp fall in production, unlike Zimbabwe or Zambia, where the domestic maize harvests are down by over 50%. Part of the reason is differences in farming practices and the improved seed cultivars in South Africa, among other factors. The significant difference is using improved seed cultivars, fertilizer, and agrochemicals. Irrigation is not a major factor, as only 10% of South African maize is under irrigation, and the rest is rainfed. This is similar to Zimbabwe's maize proportion under irrigation.
Still, Zimbabwe will likely be the significant beneficiary if the country's private sector stakeholders and government place orders promptly. Zambia, another Southern African country with a maize import need of a million tonnes, insists that the imports should only be non-genetically modified. Over 85% of South Africa's maize is genetically modified, which means that, under the current rules, Zambia may not consider South Africa a supplier of maize.
One would have expected Zambia to ease its regulations in such seasons of major maize needs. But, the government authorities have maintained this prohibition. It is already a challenge to find white maize in the world market regardless of whether it is genetically modified or not, as the primary producers are the Southern African region (South Africa specifically) and Mexico. Most of the world's maize is yellow maize for animal feed.
The drought has hit the entire Southern Africa region. Therefore, Zambia faces a tough challenge for the months ahead and is another country to watch closely towards the last quarter of this year and into the first quarter of 2025. It is all possible that, confronted with the realities of higher domestic food prices and scarcity of non-genetically modified maize supplies, Zambia may adjust its policy.
We are reading the headlines about the significant decline in Southern Africa's maize supplies. However, the full impact of the poor harvest on the consumer will likely be more pronounced towards the end of this year and into the first quarter of 2025. This is when the major maize consumers in the Southern African region would have used much of the domestic harvest, which provided a much-needed cushion in the near term. Thus, significant upside risks remain in maize prices, mainly white maize, towards the end of this year and into 2025 because of this possible regional maize demand.
Wandile Sihlobo is the chief economist at the Agricultural Business Chamber of SA and a senior fellow in Stellenbosch University's Department of Agricultural Economics. His latest book is "A Country of Two Agricultures".
