If there is one thing that stood out for me in the South African agricultural markets yesterday, it was the reports of maize exports to Zimbabwe. In the week of 24th of January 2020, South Africa exported 16 210 tonnes of maize to Zimbabwe. This may not seem like a big volume; however, it was noticeable as it is South Africa’s largest weekly maize export sales to Zimbabwe since December 2013.
What’s more, Zimbabwe has shown a greater interest in South African maize this year thus far, as illustrated in Exhibit 1 below. Here we present South Africa’s weekly maize exports to Zimbabwe (we’ve combined both white and yellow maize, but the majority is white maize for human consumption).
If you are a regular reader of this blog, you are probably aware of why Zimbabwe is suddenly a centre of attention regarding maize imports. For those who have not been following the story, the need for maize imports in Zimbabwe, according to data from the U.S. Department of Agriculture, was mainly caused by a poor domestic harvest which had fallen by 53% year-on-year in 2018/19 production season to 800 000 tonnes. Zimbabwe consumes around 1.8 – 2.0 million tonnes of maize a year, so this fall in production meant that the country would need to import at least a million tonnes of maize to cover the shortfall.
The import activity did not accelerate until earlier this year, at least from a South African market. There were small imports from Tanzania last year but that didn’t make a dent as evidenced from incidences of food shortages in the country.
On January 3, 2020, Zimbabwean President, Emmerson Mnangagwa, told Bloomberg that his country will import maize Mexico, Ukraine and South Africa to help ease pressure in the country. But there were no details on whether this was the maize that would be supplied by organizations such as the World Food Programme or private businesses, or the government agency, Grain Marketing Board.
Mexico had about 1.5 million tonnes of maize for export markets in the 2019/20, according to data from the U.S. Department of agriculture. Meanwhile, in the same season, South Africa had about 1.2 million tonnes, according to our estimates. The U.S. Department of Agriculture estimated that Ukraine had the largest volume of about 25 million tonnes of maize for the export market in the 2019/20 season.
It is unclear how much maize Mexico and Ukraine have exported thus far within their 2019/20 allocations. In the week of 24th of January 2020, South Africa had already exported to the global market 73% of the allocated maize for exports in the 2019/20 season which ends in April 2020. Zimbabwe was one of the smallest buyers, having imported only 79 283 tonnes of maize from South Africa between May 2019 and January 2020, as previously stated.
This means that South Africa and possibly Mexico have now relatively tighter stocks compared to mid-year 2019 when it became clear that Zimbabwe would need to import a large volume of maize. Had the sales been facilitated then, Zimbabwe would have found abundant maize supplies in the market. The coming weeks will be interesting to watch where Zimbabwe sources its maize, and at what price.
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