Remember the public outcry in 2016 when news came out that some greedy Zambian businessmen were smuggling maize meal to Burundi in the quest for better gains? Then, this was on the back of high maize prices in Burundi owing to lower supplies following a poor production season. I’m sad to say that two years down the line, while ‘smuggling’ seems to be muted, the situation hasn’t changed much in terms of maize prices. On 09 February 2018, the retail price of a tonne of white maize was US$543.05 (R6 326) in the Ngozi market of Burundi. A similar situation was observed in other big maize markets within the country such as Gitega and Bujumbura.
This notable uptick in maize prices is partially on the back of lower supplies due to adverse weather conditions in the last production season. Although Burundi’s 2016/17 maize production slightly recovered to 150 000, this is well below the annual consumption of 175 000 tonnes which means the country needs imports in order to fulfil its domestic needs (see Chart). This has, however, proven to be a challenge as trade restrictions continue to limit Burundi’s capacity to import food. Thus, keeping maize prices at elevated levels.
In contrast, South African maize farmers struggle to break even due to lower prices. The R6 326 a tonne of maize price seen in Ngozi Market of Burundi is treble the current prices at the Johannesburg Stock Exchange (On 16 February 2018, white and yellow maize spot prices settled at R1 777 and R1 862 per tonne, respectively, at the Johannesburg Stock Exchange).
The South African maize prices are currently under pressure due to a record harvest of 16.7 million tonnes in the 2016/17 production season. As a result, South Africa has regained its status as a net exporter of maize after being a net importer for two consecutive seasons in the 2015/16 and 2016/17 marketing years. The exports for 2017/18 marketing year are currently estimated at 2.3 million tonnes.
Ideally, part of these expected exports would serve African markets, such as Burundi. Unfortunately, this is unlikely to be the case due to restrictions on the importation of Genetically Modified (GM) crops, other trade restrictions, and logistics challenges, amongst others. Approximately 85% of South Africa’s maize production is grown with GM seeds.
Overall, Burundi is in for a tough period, we can only hope that the country gets good rainfall and the 2017/2018 production season turns out to be a better than the previous ones.