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Zambia FEWS NET MONTHLY REPORT

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Zambia FEWS NET MONTHLY REPORT Famine Early Warning System NETwork - Zambia FEWS NET MONTHLY REPORT Mid-September – Mid-October, 2001 SUMMARY ¾ Zambia is expected to receive normal to above-normal rainfall overall during the 2001/2002 production season. The Department of Meteorology forecast that for the first part of the season, the southwestern part of Zambia would likely experience normal to below-normal rainfall, while the rest of the country will likely see normal to above-normal rainfall. For the second part of the season, forecasters project normal rainfall in the southern half of the country, while the northern half is likely to receive normal to above normal rainfall. ¾ Maize stocks are starting to run low in the country, although maize imports are expected. The supply of maize meal on the market, however, is currently meeting the demand. ¾ Seeds of the main crops are adequately available to meet demand for the 2001/2002-production season. The major fertilizer supplier indicated that fertilizer to be purchased this year on a cash basis would be sufficiently available. ¾ Macroeconomic indicators worsened slightly during the last month. The annual rate of inflation increased to 17.4 percent in September, compared with 16.8 percent in August. This was attributed to a moderate increase in food prices. The Kwacha depreciated by 2 percent between mid-September and mid-October. 1.0. RAINFALL FORECAST FOR 2001/2002 SEASON Zambia is likely to receive normal to above-normal rainfall over much of the country for the 2001/2002 season, according to the Department of Meteorology. The current near-normal sea surface temperatures over the Indian, Pacific, and Atlantic Oceans—which support this forecast—are expected to continue for the next six months (October-March). This is the main agricultural season. During the first part of the season (October to December), the forecast indicates that the country is expected to receive normal to above-normal rainfall except for the western part of Western Province and the southern part of Southern Province. In these areas, including Sesheke, Shangombo, Senanga, and parts of Kalabo and Mongu in Western Province, and Livingstone and part of Kazungula District in Southern Province, rainfall is likely to be normal to below normal. During the remainder of the season (January to October), the southern half of Zambia will likely receive normal rainfall. These areas include Southern, Western, Lusaka, most of Eastern and the southern of Central Province. The rest of the country, or the northern half, is expected to experience normal to above-normal rainfall. Figures 1 and 2 depict the seasonal forecast for Zambia. A USAID Project managed by Chemonics International Incs. Plot 30G Sable Rd. P O Box 32481, Lusaka Tel: (260 1) 262750/1 Email: http:// www.fews.net Kabulonga Zambia Fax: (260 1) 262751 [email protected] FEWS NET Zambia Monthly Report – September/October, 2001 The forecast could mean some districts could again face poor harvest prospects. For example, districts such as Sesheke, Kazungula, and Livingstone — which are forecast to receive below-normal rainfall during the first part of the season — had the same situation last season. These areas experienced a prolonged dry spell at the start of the growing season last year, which adversely affected crop production. Similarly, some areas in the north likely to experience normal to above-normal rainfall had excessive rains last season. If these areas, which included Northwestern, Copperbelt, and parts of Northern Province and Chama District (Eastern Province), get above-normal rainfall as forecast, there could be flooding where water levels in rivers are still high. 2.0. FOOD AVAILABILITY Visits to the Lusaka public market at the beginning of October revealed relatively low stocks of maize available for sale at wholesale market sheds. Discussion with small traders (wholesalers) suggested that farmer stocks have almost run out. Most farmers were only remaining with stocks for their own consumption. The maize at the Lusaka market came from a single source, Mumbwa (Central Province). This lack of availability results from low stock levels in areas around Lusaka and Southern Province. The usual large truckloads of maize from Eastern Province have been absent this marketing season due to relatively lower production output. The Agricultural Commodity Exchange (ACE) also confirmed the relatively low supply of maize. In its October 19 report, ACE indicated that there was a slight upward movement in maize prices as stocks held by millers were starting to run low. Maize supplies from both small and commercial farmers are becoming low. As of mid-October, maize at the ACE was selling at US$160-183/MT, only 2.5 percent higher than that reported in mid-September. The relatively low price increments despite the looming maize shortfall has been attributed to uncertainty over the price of expected imported maize and continued supply of imported cheap maize meal. Page 2 FEWS NET Zambia Monthly Report – September/October, 2001 Most farmers preferred exchanging maize for fertilizer as planting season approaches. The small traders indicated that one bag of fertilizer costing K53,000 (US$13.98) per 50 kg was exchanging for 8 tins of maize (about 2½ 50-kg bags of maize). The full cost to transport the fertilizer from traders in Lusaka town to the farmer has been estimated at about K60,000 per bag. The traders indicated that if the maize was being sold to them at K22,500 per 50 kg, and if transport is added, the full cost came to about K26,000 (US$6.86) per 50 kg. As of the first week of October, they were selling the grain for K570/kg (about K28,500/50 kg). 2.1. Maize Import Situation The Food Reserve Agency announced tenders for the supply of imported maize by traders and purchase of the maize when it arrives by millers. Although the tender was for 200,000MT to meet the estimated commercial import requirements, only 150,000MT worth has been awarded. This was attributed to the fact that the bid prices for purchase of maize by local millers were mostly too low to attract suppliers of the commodity through imports. The imported maize is expected to be landed in Lusaka at US$210- US$247 /MT, while bids awarded for the purchase of the maize by millers once it arrives were at US$150-US$170/MT. 3.0. LIVESTOCK DISEASE OUTBREAK There has been an outbreak of African Swine Fever in parts of Zambia. Reports from the Department of Research and Specialist Services – Animal Production and Health report confirmed cases in Lusaka Province (Kafue and Lusaka Urban Districts), Central Province (Chibombo District), and Southern Province (Mazabuka, parts of Namwala and Monze Districts). Other reported cases throughout Namwala, Itezhi District and parts of Choma in Southern Province still need to be verified. Kalomo District (Southern Province) and Mumbwa District (Central Province) are under threat of the disease. Veterinary officers established that the disease had been present in Namwala as early as March 2001. It most likely spread first to Mazabuka, then Kafue District, and finally Lusaka District through pig movement to markets. To curb further spread of the disease, veterinary officers are instituting measures that include restricted movement of pigs in affected areas and slaughtering of affected animals. The neighboring countries of Tanzania and Zimbabwe have also reported cases of the African Swine Fever. 4.0. INPUT SITUATION 4.1. Seed The Zambia Seed Company (ZAMSEED) has confirmed that there is adequate maize seed in the country to meet demand for the 2001/2002-production year. The supply of other seeds such as small grains, groundnuts and cowpeas is in relatively lower quantity. Because these other seeds are of the open- pollinated variety, farmers tend to keep seed and recycle and therefore moderate production tends to sufficiently meet demand. As there is high demand for soybeans, additional seeds will need to be imported. Demand for hybrid seed has generally fallen significantly. ZAMSEED attributed this to the problem of accessing of fertilizer by small-scale farmers rather than cost. Page 3 FEWS NET Zambia Monthly Report – September/October, 2001 Due to the closure of several Omnia depots that were used to supply fertilizer to districts for either cash or exchange with maize, there is no longer demand by the company for seed from ZAMSEED. Omnia used to use seed to exchange for maize from farmers in the rural areas. ZAMSEED uses agents to sell its seed in different parts of the country. The agents indicated that the price of the seed had dropped compared with the previous year because of increased competition as other growing seed companies have picked up part of their market share. 4.2. Fertilizer Omnia revealed that with large stocks available to supply demand, fertilizer availability would not be a limiting factor to production in the coming growing season. Omnia indicated that while currently stocks are limited within Zambia, they are able to bring in more from South Africa if orders are assured and payments confirmed. For this year, Omnia is insisting on cash payment as a result of the experience of the last two previous years when credit sales severely affected their cash flow. Omnia’s reasons are that when credit fertilizer is sold around October/November, it takes another 12 months before the company receives payment and meanwhile there are costs to cover. In the last three years, the company had opened several depots in different parts of the country, with a greater concentration in the more productive districts of Southern and Eastern Provinces. Having lost the fertilizer business in both Eastern and Southern Province after the supply tender was awarded to another supplier, all their depots in those areas were closed.
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