Famine Early Warning Systems Network 22 August 2003

Highlights

• Agricultural marketing is underway in the productive northern and central zones of the country. The dynamics of agricultural trade this season are markedly different from last year due to: (a) limited trade with neighboring Malawi; (b) potentially lower than expected maize surpluses; (c) the unexpected movement of maize surpluses from Zambézia province to southern markets, due to road improvements; and (d) increased trade with Zimbabweans in , in competition with Mozambican traders from the south.

• Staple food prices show a slight but steady rise consistent with normal seasonal patterns. Wholesale prices in the center and north are lower this year than last, due mainly to the lack of demand in Malawi. In general, grain supplies on retail markets are still good, but high prices in the drought-affected areas limit poor consumer’s access to food.

• A supplementary feeding program is ongoing in drought-affected districts of Gaza, Inhambane and Tete provinces. Although the program was designed to cover over 200,000 children and pregnant and nursing women, it currently covers only 60

percent of these people due to a lack of fortified corn-soya-blend.

• Contingency planning for the next agricultural season will get underway with the seventh Southern Africa Regional Climate Outlook Forum (SARCOF 7) to be held in Lusaka, Zambia between 1–5 September 2003. Scientists will develop a regional forecast for the October 2003-March 2004 rainy season. La Nina conditions are no longer forecast.

This monthly bulletin is produced by FEWS NET in collaboration with its partners, including the Early Warning Department (DAP) and the Agricultural Market Information System (SIMA) of the Ministry of Agriculture and Rural Development (MADER), the National Institute of Meteorology (INAM), the Food and Agriculture Organization (FAO) and the World Food Program (WFP).

The Famine Early Warning System Network (FEWS NET) is funded by USAID and managed by Chemonics International, Inc.

FEWS NET • Ministry of Agriculture and Rural Development • National Directorate of Agriculture Av. das FPLM, 2698 • Instituto Nacional de Investigação Agronómica (INIA) P.O. Box 4739 , Mozambique Telephone: (258-1) 461872 • Facsimile: (258-1) 460588 • E-Mail: [email protected] • http://www.fews.net

Unusual agricultural marketing dynamics this season

The agricultural marketing season is in full swing in the productive northern and central zones of the country. The dynamics of agricultural trade thus far in the productive zones are very different from last season and somewhat different from the patterns expected earlier this season. Several key differences are: • Trading activity with Malawi is limited, unlike last season when Mozambican and Malawian traders were actively buying in the north. • Reports indicate that the maize surpluses may not be as large as last season, or as large as expected several months ago, although some stocks from last season still exist in the region. • The Agricultural Market Information System SIMA reports that maize from Zambézia (Morrumbala and Mopeia) Province is reaching markets as far south as Inhambane (Massinga), enabled by the recent rehabilitation of the national road between Inchope and Caia in Sofala. The 700-kilometer trip is shorter and less costly than the previous route, which passed through . • Food trade is accelerating in Manica Province, as both Zimbabweans and traders from the southern are actively buying maize, beans and other products.

Below is a brief summary of the current agricultural marketing situation by province, based mainly on information collected by AMODER, a local NGO working on agricultural trade:

Food availability and marketing: a provincial overview

Niassa Information from Lichinga, Sanga and Mandimba Districts indicates that the maize surplus may be considerably lower than forecast in April/May, thus reducing the volume of trade. Local maize shortfalls may be expected by the end of the year (November/December). According to AMODER, there are no signs of formal or informal maize trading with Malawi at the moment, with the exception of yellow maize exports to the aviaries in Malawi. The food security situation in those districts is stable and food availability is still good.

Exporting Marketing Ltd, a large-scale trading company, is presently purchasing most of the maize being sold in Lichinga and Sanga through networks of small and medium sized traders. The company is accumulating stocks of both beans and maize. As virtually the only buyer of maize, the company determines the prices paid to farmers. The market, on the other hand, is determining the price of beans, as there are many buyers and overall production was reduced due to irregular rains.

Cabo Delgado In Montepuez, Balama, Namuno and Chiúre Districts, bad secondary and feeder roads, leading to high transport costs, have led to an absence of maize purchasers. In Balama, for instance, there are large quantities of maize stocks with no buyers. The food security picture is considered good, although cassava production is below expectation.

Export Marketing has established many small buying posts in the province, competing directly with small-scale traders. Farmers are not happy with the current maize purchasing price.

2 Nampula In this province, reports from Memba, Nacaroa, Monapo, Mogincual, Meconta and Nampula Districts indicate that the volume of trade in cereals is relatively weak. This is due to smaller than expected agricultural surpluses. Cassava is traditionally the main staple food in that region, but due to “Brown Streak Virus”, people are turning to grains instead, reducing the previously expected marketable surpluses.

In Monapo and Meconta Districts, a large shift in production from cotton to maize was observed due to the fall in prices of cotton. This fact explains the increase in maize surpluses compared to last year. Producers currently consider maize prices very low, so many producers or small- scale traders are opting to store maize now in hopes of higher prices later in the year, especially in the coastal districts. The cassava harvest, severely affected by the brown streak virus especially in coastal districts, will be underway in August.

Zambézia Maize trade has been slow in the districts of Mocuba, Alto-Molócuè, Ile, Lugela and Quelimane, as farmers are willing to sell only small quantities at the prices currently offered by traders (1200-1400 Meticais/kg), preferring to hold their stocks until later in the year, when prices will be higher. On the other hand, bean prices are increasing due to short supply.

Tete The situation is mixed in Tete, where some districts have performed well and others face deficits due to poor crop production. Angónia, Tsangano, Macanga, Marávia, Cidade de Tete, Cahora Bassa and Moatize Districts traditionally export their agricultural production to Malawi. However, the demand in Malawi has declined significantly due to sufficient supplies there. Districts where large stocks of maize exist with no buyer include Angónia, Tsangano, Marávia, Chifunde and Zumbo (particularly in Zambue and Muze, the most productive zones of the district). Wholesale traders are operating in Macanga, Moatize and Guro (Manica) Districts. It should be noted that many informal traders are buying and storing maize to sell from November onwards when food availability is reduced and prices rise.

Manica According to district agricultural authorities, agricultural marketing in Manica Province is taking place everywhere with the exception of the most deficit districts of Machaze and Tambara. Since the beginning of the current year, trade with neighboring Zimbabwe has increased, with maize, rice and cooking oil flowing out of the province into Zimbabwe. Sussundenga District has been supplying maize to markets in southern Mozambique. Marketing is mostly done by informal traders, although some licensed companies are operating.

Sofala Similar to neighboring Manica Province, the agricultural marketing in Sofala is also mostly done by informal traders. Nhamatanda and Chibabava Districts are supplying maize to southern markets, mainly in Massinga, Chókwe and Maputo.

3 Food prices: retail, wholesale and producer price trends

Retail prices Over the last four weeks, retail maize prices have been stable in the main markets of the country. However, taking a longer view, staple food prices have shown a steady rise, consistent with the normal seasonal behavior for this period of year. Minimum prices are normally observed in May/June, right after the main harvest. In general prices are higher in the south than the north, consistent with the agricultural performance in the country. The southern regions, which were severely affected by two consecutive years of drought, are dependent on importation and so prices are relatively high. In general, grain supplies in the main retail markets are still good, but high prices in the south may be limiting poor consumers’ access to food.

Wholesale prices Fluctuations in the monthly wholesale prices and comparisons with last season are shown in Figure 1.

Figure 1 Average monthly maize wholesale prices in selected markets

5000 4500 2003 2002 4000 3500 3000 2500 2000 1500 Prices in Mts/Kg 1000 500 0 Jul Jul Jul Jul Jul Jul Jul Apr Apr Apr Apr Apr Apr Apr Jun Jun Jun Jun Jun Jun Jun May May May May May May May Maputo Xai-Xai Maxixe Beira Quelimane Nampula (South) (South) (South) (Center) (Center) (Center) (North)

Data Source: SIMA

Due to the near total failure of production for the 2002/03 cropping season in , this year’s maize prices in Xai-Xai (Gaza Province) have been consistently higher than last year’s. Quelimane in Zambezia Province shows the opposite pattern, with 2003 prices consistently lower than last year. The lower prices in the north are attributed mainly to the lack of markets since the main potential buyer, Malawi, is saturated with maize. Maputo prices continue to be the highest in the country but are currently similar to those last year.

Producer prices This sub-section of price analysis is based on a series of farm-gate interviews conducted by AMODER’s provincial representatives in selected locations in July. The following table shows the trend of maize producer prices, the selling opportunities, and the quantity of maize surplus this year compared to last year.

4 Table 1 Summarized results of farm-gate interviews Location Meticais/ Price tendency Able to Surplus this (District, Province) kg (from last sell? year month) compared to last year Memba, Nampula 2000 Increasing no* more Alto Molocue, Zambezia 1250 Increasing yes less Lichinga, Niassa 2050 Increasing yes less Chiuta, Tete 2350 Increasing yes mixed Balama, Cabo Delgado 1500 Increasing yes less *many farmers are choosing not to sell, instead waiting for prices to increase.

As shown in the table, maize prices in July were increasing in comparison to June. With the exception of Memba in , all of the selected districts have been able to sell their maize surpluses.

Based on normal seasonal trends the prices are expected to rise during the coming months. Recent price reports are confirming this tendency at both producer and consumer level.

Supplementary feeding program only reaching 60 percent of planned beneficiaries

As a complement to the emergency food aid program in the 40 districts affected by the current drought1, UNICEF and WFP are operating a supplementary feeding program for children from 6- 59 months and pregnant and nursing mothers in areas most affected by food shortages. The

Table 2 – Registered beneficiaries by district Registered Beneficiaries Province District Children (6-59 months) Pregnant/Lactating Women Gaza Chibuto 3,359 1,950 Massangena 2,404 1,396 Guija 12,916 6,458 Chigubo 2,352 1,264 Chicualacuala 5,097 2,549 26,128 13,617

Inhambane Funhalouro 4,700 1,304 Mabote 3,330 1,934 8,030 3,238

Tete Cahora Bassa 7,081 3,817 Changara 24,087 13,237 Moatize 8,760 4,750 Magoe 11,764 5,643 51,692 27,447

Total Beneficiaries 85,850 44,302

1The most recent Vulnerability Assessment Committee report provides details on the current food security and nutrtion situation. For a summary of this analysis, see the July FEWS NET Food Security Update and the August SETSAN InfoFlash, both available on www.fews.net.

5 program, underway since the start of the year, was designed to cover 141,000 children and 71,000 pregnant and nursing women. However, it currently reaches only 60 percent of these people due to a lack of Corn-Soya-Blend (CSB). Table 2 (see previous page) provides details on numbers and types of beneficiaries by district.

Seven NGOs have already started implementing this program, and four more are scheduled to start in August. Additional NGOs are prepared to distribute the supplementary food, but insufficient supplies mean that new programs can not be started. Stocks of CSB currently in the country should cover the supply requirements of NGOs currently implementing programs through the end of the year, but no additional supplies are in the pipeline to meet the needs of the entire target group or to continue beyond December.

SARCOF to be held in Lusaka: a tool for contingency planning

The seventh Southern Africa Regional Climate Outlook Forum (SARCOF 7) will be held in Lusaka, Zambia between 1–5 September, 2003. The Forum will bring together scientists involved in seasonal climate prediction, the user community and decision-makers from the water and media sectors. Scientists will develop a consensus climate outlook for the October 2003-March 2004 rainy season and project its potential impacts on regional food security, health and other social and economic sectors.

Based on the climate outlook, users will be able to draw up their respective contingency plans. These plans will cover different areas such as agriculture, disaster management, health strategies (especially on malaria control programs) and food security as a whole.

ENSO update: Neutral conditions now more likely

The latest observations indicate that there is no longer a significant chance that La Niña conditions will develop over the next months. During a La Niña event, Mozambique tends to experience normal to above normal rainfall and flooding. Ocean temperatures that had been below normal in May and June have returned to normal and this is expected to continue for the rest of the year. IRI’s current seasonal forecast for the October-December period shows a slightly increased probability for above normal rains in the south of Mozambique.

6