Informal Cross Border Food Trade in Southern Africa
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1 Monthly Highlights: Observed informal cross border trade in maize, rice and beans continue to decline as demand for imports declines in Malawi and Zambia due to favorable harvests. Maize prices are lower than last year at the same time, unlikely to reach last year s peaks. Zimbabwe to scale up formal imports. Inside this issue: Summary of maize trade flows Maize price trends Formal exports from South Africa 2 Informal Cross Border Food Trade in Southern Africa Issue 2 Overall summary of trade flows Fig. 1 Recorded Informal Cross Border Maize Trade in DRC, Malawi, Mozambique, South Africa Tanzania, Zambia & Zimbabwe Between April and August the Informal Cross-border Food Trade Monitoring system in Southern Africa has recorded nearly 6, MT of informal cross-border trade in maize, rice and beans. Maize, at 54, MT, accounts for 9% of the trade with rice and bean trade contributing 5% each to the overall trade. As shown in Figures 1 and 2 the current trade is 28% down on last year at the same period. Most of the reduction is in the rice and bean trade which have declined by 75% and 68% respectively. These reductions in volumes traded this year in comparison to last year are as expected. As reported in our June report, there is low demand for cereal imports Fig.2 Recorded Informal Cross Border Food Trade in Rice & Beans in the major importing countries of DRC, Malawi, Mozambique, South Africa Tanzania, Zambia & Malawi and Zambia due to above average harvest in these countries. Zimbabwe Another major importer, Zimbabwe, will still require imports. Malawi and Zambia have declared cereal surpluses. On the basis of the trend established over the past three years, further reductions in volumes traded are expected over the next month before volumes traded start to rise again due to lean season demand starting from November or December. July & August 26 24/5 M arketing 25/6 M arketing 26/7 M arketing Apr M ay Jun Jul Aug Sep Oct Nov Dec Jan Feb M ar /5 25/6 26/7 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Rice Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Beans Summary of trade in rice and beans 4 Summary tables 5 Monitoring movements of salt 6 A Technical Steering Committee (TSC) of the Cross Border Food Trade Monitoring Initiative, with funding from USAID and WFP, has prepared this report based o data collected by a network of border monitors based at selected border points. Borders throughout the region have been surveyed and the most active and important borders have been selected for monitoring. The border monitors record data on a daily basis, and transmit it to a central location every week for collation and analysis. Currently, the informal cross border trade monitoring system includes 29 borders, with new borders being added as necessary. Data from borders surrounding Malawi are collected and managed by FEWS NET an WFP Malawi, while the rest of the borders are managed by the TSC. Address comments/suggestions to the following addresses: pmdladla@fews.net, simon.dradri@wfp.org; eric.kenefick@wfp.org;
2 Page 2 Informal Cross Border Food Trade in Southern Africa Summary of maize trade flows Table 1 summarizes and compares the volumes of maize trade for August 25 and 26. Trade in maize continues to be dominated by imports by Malawi from Mozambique with insignificant flows from Tanzania to Zambia and from Zambia to DRC. A similar amount of maize was imported by Malawi from Mozambique this August as it was last August. The dynamics of the trade by border point remain unchanged. The Muloza (Malawi) and Milanje (Mozambique) border remains the most significant in maize trade. Maize flows from Milanje to Muloza accounted for 5% of the overall trade in maize recorded in August. Another significant border point in maize trade is Kalanje (again between Malawi and Mozambique) which accounted for 12% of the trade in August. Meanwhile, according to the Regional Agricultural Trade Intelligence Network (RATIN) reports, Tanzania has announced an export ban on food crops including maize effective August. The Tanzanian authorities say they have taken this measure as a strategic precaution against impending periodic food supply shortages as well as in view of the poor harvests in some parts of the country. Apart from Tanzania, Malawi and Zimbabwe still maintain cereal export bans. Due to the surplus production this year, Zambia has lifted its export ban. However, only the Food Reserve Agency (FRA) has been permitted to export up to 1, MT, while the ban remains in place for the private sector. The recently announced export ban by Tanzania is not expected to have adverse impact among its neighbours in Southern Africa as both Malawi and Zambia (which imported significant volumes last season) have registered surplus production. Figure depicts the changing dynamics of trade in maize between this season and last year. Table 1 Informal cross-border trade in maize Source Destination 24/5 25/6 Aug 5 Aug 6 (Apr-Jul 6) Tanzania Zambia,699 1,556 2,87 51 Zambia Zimbabwe 1, Zambia Malawi 2, Zambia Tanzania 9 Malawi Zambia Zambia DRC 8,18 4, , Mozambique Malawi 71,229 71,218 1,5 8,6 1,92 Malawi Tanzania , Tanzania Malawi 2,656 84,862 5 Mozambique Zimbabwe Mozambique Zambia Malawi Mozambique - 1 Zambia Mozambique Zimbabwe Mozambique South Africa Zimbabwe - 1, Total Traded (MT) 11, ,959 14,87 42,521 11,26 Fig. Informal maize exports by exporting country: 25/6 season vs 26/7 season Malawi Mozambique Tanzania Zambia South Africa 25/6 (Apr-Aug) 26/7 (Apr-Aug)
3 Issue 2 Page Maize Price Trends at Selected Border Points As shown in Figure 4, there are no major shocks on maize retail prices. Until now, the prices are following a similar trend to that established last year. However, except for the Songwe/Kasumuru/Nakonde region, prices are lower this marketing season as compared to the last. Retail prices along the Malawi/Mozambique border have on average declined by 27% from an average of US$.18 per kilogram in August 25 to an average of US$.1 per kilogram by August 26. Prices along the Songwe/Kasumuru/Nakonde region have gone up by 2 percent. The decline in prices is attributable to the above average seasons in Malawi and Mozambique whereas the rising prices could be explained by the rising demand for maize in Tanzania as a result of poor harvests in some parts of that country. However, as the lean season approaches (from November onwards for most of Southern Africa), maize retail prices are expected to start rising soon. For Malawi, the recently announced government consumer price of about US$.18 per kilogram is likely to exert an upward pressure on retail prices. Nonetheless because of the generally reduced demand for cereals, it is unlikely that maize retail prices will reach the highs of up to US$. per kilogram attained last year. Figure 4 Retail maize prices in selected border points (US$ cents per kg) 5 Malaw i Mozambique Zambia Tanzania DRC Jl A S O N D J F M A M Jn Jl A Jl A S O N D J F M A M Jn Jl A Jl A S O N D J F M A M Jn Jl A Jl A S O N D J F M A M Jn Jl A Muloza Songwe/ Kasumuru/ Nakonde Machipanda Kasumbalesa Formal exports from South Africa According to the South African Grain Information April to August 26 Service (SAGIS), among the monitored countries, only Zimbabwe and to a little extent, Mozambique continue to import white maize from South 94 Africa. Zimbabwe has imported nearly 1, MT from South Africa since April 26. In addition, 1825 news reports indicate that Zimbabwe has Malawi Mozambique Zambia Zimbabwe imported about 1, MT from Zambia between July and August. Despite the reports, according to our border monitors, it is unlikely that the maize has been moved to Zimbabwe as yet. According to the country s Grain Marketing Board, Zimbabwe would be importing 8, MT at the rate of 12, MT per month. Last year Zimbabwe imported just over a million MT of maize from South Africa, Malawi imported about 66, MT, whereas Zambia imported some 8, MT. Despite surplus maize production in its central and northern provinces, Mozambican white maize imports from South Africa have been steadily increasing. Since April the imports have risen to 18, MT. Due to logistical reasons, it is economically viable for some areas of southern Mozambique to import maize from South Africa rather than moving it internally from northern provinces.
4 Page 4 Informal Cross Border Food Trade in Southern Africa Table 2. Informal cross border trade in rice (MT) - see page 5 for summary table Source Destination 24/5 25/6 Aug 5 Apr-Jul 6 Aug 6 Tanzania Zambia Malawi Tanzania Tanzania Malawi Zambia DRC 12,644 12,629 2,14 6 Zambia Malawi 14 Malawi Zambia 1 1 1,29 Zambia Zimbabwe Mozambique Malawi 2,52 1, Malawi Mozambique Mozambique Zimbabwe South Africa Zimbabwe Total Traded (MT) 16,55 16,62 2,14 2,49 6 Bean trade between Malawi and Mozambique dominated the trade in August although Zambia remains the largest exporter. Summary of trade in rice and beans The trade in rice and beans is summarized in Tables 2 and. Trade in both commodities remains very low compared to last year at the same time. This could be due to several reasons including better availability of rice in Malawi after two successive good harvests and reduced demand in DRC. Malawi and DRC are the major importers of rice. Volume of rice observed in August was nearly MT compared to close to 2, MT in August last year. Bean trade however, has been steadily increasing since April and was nearly 9 MT in August. Bean trade between Malawi and Mozambique dominated the trade in August although Zambia remains the biggest informal exporter of beans. On the basis of the established trend over the past two seasons the volume of beans traded is expected to decline until the winter crop from such countries as Malawi, comes on stream around November and December. Table. Informal cross border trade in beans (MT) Source Destination 24/5 25/6 Aug 5 Apr-Jul 6 Aug 6 Tanzania Zambia Zambia Tanzania Zambia DRC 12,19 8,21 1, Malawi Mozambique ,2 2 Zambia Zimbabwe Mozambique Malawi 2,997 2, Malawi Tanzania 2 Mozambique Zimbabwe Malawi Zambia Tanzania Malawi 4 2,459 5 South Africa Zimbabwe Total Traded (MT) 16,816 14,4 2,141 1,
5 Issue 2 Page 5 Summary Tables Table 4: Informal Cross border trade in maize (MT) Source Destination 24/5 Jul5 Aug5 25/6 Apr6 May6 Jun6 Jul6 Aug6 Tanzania Zambia,699 1,77 2,87 1, Zambia Zimbabwe 1, Zambia Malawi 2, Zambia Tanzania 9 Malawi Zambia Zambia DRC 8, , Mozambique Malawi 71,229 11,515 1,5 71,218 5,17 1,56 11,77 1,557 1,92 Malawi Tanzania , Tanzania Malawi 2, ,862 Mozambique Zimbabwe Mozambique Zambia Malawi Mozambique 1 Zambia Mozambique Zimbabwe Mozambique South Africa Zimbabwe , Total Traded (MT) 11,929 1,987 14,87 177,959 6,75 12,429 12,151 11,26 11, ,9 48,428 2, ,847 Table 5: Informal Cross border trade in rice (MT) Source Destination 24/5 Jul5 Aug5 25/6 Apr6 May6 Jun6 Jul6 Aug6 Tanzania Zambia Zambia Zimbabwe Zambia Malawi Malawi Zambia Zambia DRC 12,644 2,64 2,14 12, Mozambique Malawi 2,52 1, Malawi Tanzania Tanzania Malawi Mozambique Zimbabwe Malawi Mozambique South Africa Zimbabwe Total Traded (MT) 16,55 2,262 2,14 16, , , ,61
6 Informal Cross Border Food Trade in Southern Africa Monitoring movements of salt across borders UN World Food Programme Regional Bureau for Southern Africa Merafe House Johannesburg, RSA FEWSNET Regional Office Pretoria, RSA Starting next month, border monitors along the Malawi/Mozambique border crossings will begin to monitor movements of salt from Mozambique into Malawi. The monitors will not only record the amount and source of the salt, they will also test it to see if it has been iodized. This activity was initiated by Dr. Saba Mebrahtu, UNICEF Regional Advisor for Nutrition and Dr. Oliver Mohr, a UNICEF nutritionist based in Johannesburg. The goal of this initiative is to help identify where informal salt producers are located within Mozambique so UNICEF can provide technical support on how to iodize their salt. After the pilot in Malawi, the salt monitoring will expand to all border crossings in Mozambique. Map 1: Border crossings currently being monitored For more information see:
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