The Zimbabwean government forecasts staple maize production will drop 72% in the 2023/24 season, worsening the country’s food situation due to an El Nino induced drought.

The forecast is according to the Government’s Second Round of Crops, Livestock and Fisheries Assessment report released on May, 8.

The report estimates maize production at 634,699 tonnes for the season ending 31 May 2024 from 2,298,281 produced in the previous season, a 72% decrease.

This comes as Zimbabwe is grappling with a shortfall of 1,108,425 tons of grain, with 7.7 million people in the country in dire need of food aid.

The region is reeling from its worst drought in 40 years, owing to a combination of the naturally occurring El Nino and higher average temperatures produced by greenhouse gas emissions.

Recently, the nation declared the ravaging drought a national disaster, after Zambia and Malawi made similar pronouncements.

Zimbabwe needs 2.2 million tons of cereal annually for both human and livestock consumption

To cover the deficit, Zimbabwe’s government plans to import grain, with its private millers looking to source 1.4-million MT of white and yellow maize in the next two months from Brazil, Mexico, Russia, Argentina and America.

In addition, the country has appealed for US$2bn (R37bn) from humanitarian agencies and well-wishers to feed millions.

Finance Minister Mthuli Ncube has said the government would reallocate some budgeted funds from other portfolios to fund grain importation.

Meanwhile, government of Zimbabwe has released the Winter Cereal Production Plan as part of El Niño-induced drought mitigation efforts.

According to the plan, contractors are expected to plant 123 500 hectares for an estimated yield of 624 000 metric tonnes of wheat, while the targeted area for planting barley is 7 000 hectares.

Maize/sorghum is expected to cover 3,250 hectares, and potato planting is expected in warmer areas in August.

In addition, the government has announced a 31 percent reduction in water charges for irrigation farmers as part of the strategies to ensure a successful winter wheat season.

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Kenya has announced plans to export its maize to Zambia as the drought-stricken country grapples with maize shortage.

Speaking during the Africa Fertiliser and Soil Health Summit held in Nairobi, President William Ruto revealed the move to export maize to Zambia was triggered following a bumper harvest by Kenyan farmers.

While making the announcement, Ruto also urged the African Heads of State to leverage the African Free Trade Area to allow free trade within the continent.

“That is why it is important to leverage on the Pan African initiative and integration to provide the basis to harness research and technology to develop a robust soil formation system,” Ruto stated. 

According to Ruto, the government would only deviate from its ban on maize imports only if the local produce would be insufficient.

Zambia scraps tax on maize imports

Meanwhile, the Zambian cabinet has approved the suspension of tax on all imported maize to address shortage caused by drought, Chief Government Spokesperson Cornelius Mweetwa said on Wednesday.

Zambia has been suffering from severe drought due to the El Nino phenomenon, which is worsening harsh weather conditions attributed in part to climate change.

In February, President Hakainde Hichilema declared the drought a national disaster highlighting that it has adversely impacted the food production in 84 out of the country’s 116 districts, destroying about 1 million hectares of the 2.2 million hectares planted with the staple maize crop.

While the government will be at the centre of importing maize for strategic reserves, the private sector is also encouraged to seize the opportunity and engage in maize imports, Mweetwa said.

Mweetwa, who is also minister of information and media, said the cabinet has instructed the Agriculture Ministry to start issuing permits to Zambians for maize imports.

The decision comes after Zambia’s disaster response agency, recently reported that the country needs about 738,000 metric tonnes of maize to provide for people adversely affected by drought for their food requirements for 14 months.

Gabriel Pollen, national coordinator for the Disaster Management and Mitigation Unit, said the maize is required in the immediate response to provide relief food to about 6.6 million people in 84 of the country’s 116 districts adversely affected by the drought.

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The decline in stocks was led by major exporters, whose supply levels are particularly important in setting world prices.

Chicago wheat futures for July-24, which had strengthened ahead of the US Department of Agriculture’s (USDA’s) monthly Wasde briefing, on worries for damage to Russia’s winter crop from dryness and cold, edged higher in the aftermath to trade up 3.6%.

Paris milling wheat for September-24 stood up 2.3% in late deals, back above €250/t for the first time in nine months.

Best-traded London feed wheat for November-24 gained 1.2% to settle at £218.60/t, its best finish in 14 months.

USDA
The USDA’s May Wasde report is viewed as particularly important by the market, in issuing first full world crop supply and demand forecasts for the next season, in this case 2024/25.

The USDA forecast US wheat stocks expanding less significantly than the market had anticipated in 2024/25, to 20.9 million t, on a modestly lower-than-expected harvest estimate of 50.6 million t, up by only 1.3 million t year on year.

Inventories in most other major exporters, including those in the EU, Russia and Ukraine, are expected to shrink next season, on production decline.

Russia’s harvest was forecast shrinking by 3.5 million t year on year to 88 million t. Separately, SovEcon also cut its Russia wheat production estimate for 2024/25, to 89.6 million t, a dip of 3.2 million t year on year on its estimates.

EU all-wheat production was seen declining by 2.2 million t to 132 million t.

The estimates fed through into a forecast for world wheat stocks of 253.6 million t at the close of next season, shrinking by 4.2 million t year on year to the lowest since 2015/16. The figure was 2.8 million t below that traders had anticipated.

Wheat stocks held by the top seven exporters were seen closing next season at their smallest in 12 years, and the tightest in even longer period, when compared with world consumption.

The UK’s wheat harvest-24 was pegged at 11.2 million t, down by 2.8 million t from 2023, and fostering growth in 2024/25 imports to an expected 3 million t, from the 2.6 million t factored in for the season.

Source: Dry Bulk

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