Highlights:
South Africa is estimated to produce 7 million tonnes in the 2015-16 harvest, a 3.8 million tonne shortfall compared to the 2014-15 harvest. The shortfall is expected to have important repercussions on food security levels in 2016 across the whole of southern Africa (USDA, 2016).
Due to the difficult 2014-15 cereal harvest in southern Africa (3% above 5-year average trends but 21% lower than 2013-14 levels), maize prices in the region have been increasing 3-4 months before the expected time of the lean season thereby pushing prices higher than their usual levels for the time of year.
Maize prices in 2016 have continued on an increasing trend from 2015 and are currently above five-year average levels for the time of year. As of January 2016 the price of maize in Malawi stands at 79.4% above its three-year average level for the time of year. The price of maize in January 2016 compared to five-year average levels across Southern Africa are as follows: Mozambique stands at 94.8%; South Africa 65.8%; Swaziland 54.5%; Tanzania 34.7%; Zambia 27.1%; Lesotho 24.8%, and Zimbabwe 19%
WFP ALPS: 72.5 percent (95 out of 131) of ALPS monitored markets in southern Africa are either in Stress, Alert or Crises in January 2016, down from 94.6 percent of markets in December 2016. Zambia is experiencing a considerable decrease in the number of markets in Alert or Crises due to government intervention policies and cheaper maize from Tanzania.
As the lean season progresses, further increases in food prices are expected, instigated by low regional cereal stocks and speculation on the effects of El Niño weather vagaries on the 2015-16 regional cereal harvest.
Current International Food Staple Price Trend
FAO’s Food Price Index (FFPI) averaged 150.4 in January 2016. This represented a decline of almost 3 points (1.9%) compared to December 2015 and down 29 points (16%) compared to January 2015. The prices of all commodities tracked by the FFPI fell, with sugar and dairy products registering the steepest decline. Moreover, the FAO Cereal Price Index was at 149.1 points in January down 2.5 points (1.7%) since December. The falling prices are thought to be led by ample global supplies, increased competition on the grain market and a strong US Dollar.
Unlike international food commodity prices, food prices in southern Africa continued maintained their above 5 year average price Source: FAO http://www.fao.org/worldfoodsituation/foodpricesindex/en/ levels. This is primarily driven by: the region experiencing reduced staple volumes on local markets due to a difficult 2013-14 harvest; serious national currency devaluations making imports more expensive reducing supply and driving up prices; high transportation costs especially for land-locked countries increasing the price of imported foods; and the prolonged dry-spell which is driving the second consecutive below average cereal harvest in the region.