I’ve noticed on the news wires this evening that Zimbabwe has banned its local farmers from selling maize to anyone other than the state Grain Marketing Board as the government moves to keep prices of the staple food down. This move follows a poor harvest after another season of unfavourable weather conditions.
On the one hand, the government’s action to intervene in the maize market shows a concern for the consumers’ wellbeing as food price inflation quickens. On the other hand, these actions could disadvantage the farmers who had hoped that higher maize prices could compensate for yield losses. This will specifically be the case if the Zimbabwean government sets its ‘maize floor price’ below the global maize prices. I am anxiously waiting to see what the decision on this will be.
Another point to keep an eye on is that the Zimbabwean Grain Marketing Board has recently issued a tender to buy 750 000 tonnes of maize in order to fulfil its domestic needs. This will be the largest import volume since 2016 when the country imported 1.4 million tonnes of maize. I haven’t seen any indications of cross-border movement of the grains yet. I suspect that the potential maize suppliers will be South Africa, Zambia, Mexico and Ukraine. And oh, in this case, the Zimbabwean maize buyers (government’s Grain Marketing Board) will have to pay the world price. So, would they discriminate local farmers from the global market? Only time will tell.
You can read more about the Southern and East Africa maize dynamics in my previous post here.
Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za
