by Wandile Sihlobo | Jun 11, 2020 | Agricultural Production
This essay first appeared on Business Day, June 9, 2020
Some countries in the Southern and East Africa regions will again need large imports of maize in the 2020/2021 marketing year, which ends in April 2021. However, their saviours won’t be your typical major global producers such as Ukraine, the US or Brazil. Rather it is most likely to be SA and Zambia waiting in the wings.
In Southern Africa, the recent data released by Zimbabwe’s department of lands & agriculture placed its 2019/2020 maize harvest at 907,628 tonnes, up 17% from the previous season. Nevertheless, this is below Zimbabwe’s 10-year average maize production of 1.1-million tonnes and annual domestic consumption needs of between 1.9-million and 2-million tonnes. The 2019/2020 production season corresponds with the 2020/2021 marketing year, which means Zimbabwe will still need to import about 1-million tonnes of maize to fulfil domestic needs in the 2020/2021 marketing year.
Meanwhile, in East Africa, the International Grains Council forecasts Kenya’s 2019/2020 maize harvest at 3.4-million tonnes. This is roughly unchanged from the previous season, though there have been good rains over the past few weeks in the grain-producing regions of the country. With Kenya’s annual maize consumption at about 4.7-million tonnes, the aforementioned production estimate means the country could require imports of about 1.3-million tonnes in the 2020/2021 marketing year.
Unlike the other seasons, where African countries would look outside the continent for maize supplies in seasons of deficiency, SA and Zambia could emerge as key maize suppliers. Both countries are expecting their second-largest maize harvests on record for the 2019/2020 production season. In the case of SA, the expected harvest is 15.6-million tonnes, against domestic consumption of about 11-million tonnes. In the case of Zambia, the 2019/2020 maize harvest is estimated at 3.4-million tonnes against domestic maize consumption of 2.2-million tonnes.
This means SA could have at least 2.7-million tonnes of maize for export markets in the 2020/2021 season, which is 89% up year on year. Meanwhile, Zambia could have 1-million tonnes of maize exports, up from 100,000 tonnes the previous year. This would be the third year on record that Zambia would be able to export as much as 1-million tonnes of maize.
Other key maize producing and consuming countries in the Southern and East Africa regions, such as Malawi and Tanzania, will most likely have balanced supplies for their domestic markets and therefore limited room for exports. Hence our focus is on Kenya and Zimbabwe. Also, worth noting is that SA and Zambia are among the most prominent suppliers of maize to Zimbabwe and Kenya and featured among the top five maize suppliers to both countries in 2019, according to data from Trade Map.
Biosecurity policy is always an important consideration when it comes to African markets. To this end, SA has in the past experienced phytosanitary barriers because of its use of genetically modified maize seeds, which account for about 80% of its output. But this time around things will be different. Zimbabwe lifted its ban on genetically modified maize imports from January 31 as the country tried to improve local supplies after a poor harvest in the 2018/2019 season.
With the harvest of the 2019/2020 season also likely to be relatively low, this policy decision will help ease maize imports into Zimbabwe in the coming months. In the case of Kenya, however, there is still a ban on the importation of genetically modified maize. This might limit SA’s participation in Kenya, while Zambia, which produces non-genetically modified maize, might become a prominent player in the Kenyan market. SA’s importance is likely to be concentrated in the Zimbabwean market, but the bottom line is that SA and Zambia will be key sources of maize imports for the southern and East Africa regions within the 2020/2021 season.
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by Wandile Sihlobo | Feb 19, 2020 | Agricultural Production
In his 2020 State of the Nation Address, President Cyril Ramaphosa noted that “this year we will open up and regulate the commercial use of hemp products, providing opportunities for small-scale farmers; and formulate policy on the use of cannabis products for medicinal purposes, to build this industry in line with global trends. The regulatory steps will soon be announced by the relevant ministers.” This is already part of the sectoral master plans that are being developed, specifically the Department of Agriculture, Land Reform and Rural Development, as well as at the Department of Trade, Industry and Competition.
South Africa is not the only African country that is suddenly taking interest in cannabis. A number of Africa countries have in the recent past reformed their cannabis regulations – moving away from it being a prohibited drug to a source of income as an exportable commodity. This is motivated by the promise of riches, with many policymakers viewing the burgeoning cannabis industry as offering prospects for boosting rural economic growth and job creation. This seems to be particularly the case for South Africa, although it is still unclear how much revenue the country can derive from this plant.
Such countries include Lesotho, which was the first African country to issue licences for the cultivation of medical cannabis in 2017. This saw international investment being directed into the country in 2018. Zimbabwe issued its first cannabis licence in March 2019. Zambia is the latest country to legalise medical cannabis, announcing in December 2019 that medical cannabis for export would be permitted in the country. However, the government has stressed that cannabis will remain prohibited for domestic use. Uganda has also taken positive steps towards legalisation of medical cannabis, having issued commercial licences to two operators, and looking to potentially legalise medical cannabis cultivation in 2020.
Other countries, like Eswatini, have also put in place a draft bill regulating cannabis. Similarly, to Zimbabwe, cannabis production in Eswatini is restricted to medicinal purposes and scientific research. Malawi has also moved glacially in putting in place its own licensing regime. Export markets and foreign exchange earnings are the key drivers for cannabis regulatory reforms in this country.
In short, many African countries are gradually considering legalising the cultivation of cannabis for medical and scientific purposes. Those countries where reforms are in motion are using the Canadian code as a guide for developing their licensing regimes. For many of them, the major motivating factors are boosting exports to earn hard currency, reducing unemployment, rural development and increasing agricultural productivity. Broadening their tax base is another important consideration, which in the South African case has been noted by the Finance Minister, Mr Tito Mboweni.
I won’t dwell much on my ideas about how South Africa should explore the virtues of cannabis as I have also covered the subject in one of the chapters in my upcoming book — Finding Common Ground: Land, Equity and Agriculture — which will be published by Pan Macmillan in April 2020 (It will be available nationwide. You can pre-order it here).
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by Wandile Sihlobo | Feb 8, 2020 | Africa Focus
Necessity is the mother of invention, and this rings true in Zimbabwe where the government is reformulating policy. The Zimbabwe government has for years maintained a ban on the importation or growing of genetically modified (GM) maize, but the current food shortages in the country have forced the government to change its policy stance. The ban on GM maize imports was lifted on the 31st of January 2020 as the country seeks to improve local supplies following yet another poor harvest season.
Zimbabwe’s maize production fell by 53% y/y in the 2018/19 production season to 800 000 tonnes, according to data from the United States Department of Agriculture. This was far below the country’s annual maize consumption of between 1.8 and 2.0 million tonnes. Therefore, the country had to import at least a million tonnes of maize in order to meet the local supply requirements.
But the dearth of timely and credible data has made it a challenge to track the maize importation activity into Zimbabwe. Observing from reports of food shortages at the beginning of the year, I am inclined to believe that the country was unable to import the required maize volume for the 2019/20 marketing year (this corresponds with the 2018/19 production season which was a drought year).
Zimbabwe imported 100 000 tonnes of maize from Tanzania in 2019, according to Japhet Hasunga, Tanzania’s Agriculture Minister, and 79 283 tonnes from South Africa between May 2019 and January 2020, according to data from the South African Grain Information Services. This data supports my view that Zimbabwe has thus far imported less than the required maize quantities to meet consumption requirements. The slow pace of imports might have been caused by fiscal constraints on the back of the country’s ongoing macroeconomic crisis. The stringent regulations on the importation of GM maize might have also contributed to the slow pace of imports.
South Africa had about 1.2 million tonnes of maize available for export markets in the 2019/20 marketing year which ends in April 2020, however, roughly 80% of its maize is produced from GM seeds. This means that South Africa was inhibited from supplying the Zimbabwean market under its stringent GM policy. This is evident from South Africa’s maize exports data; the country exported 900 585 tonnes of maize between May 2019 and January 2020. But Zimbabwe imported only a 9% share of this total volume. With international humanitarian organizations such as the World Food Programme actively assisting Zimbabwe to avert the current food crisis, the lifting of the GM maize import ban could accelerate maize import activity into Zimbabwe in the coming months. The maize might originate from South Africa and other leading maize exporting countries such as the United States, Brazil, Mexico and Russia, amongst others, who have in the past exported maize to Zimbabwe.
The challenge for countries aside from South Africa and Mexico is that they are not major white maize producers, which is the preferred maize variant across Southern Africa. Hence, the recent GM policy change will benefit maize exporters from South Africa and Mexico in the near term. Moreover, Zimbabwe’s maize deficit might not end in May 2020, which would have marked the end of their harvesting period. The country’s 2019/20 maize production season started on a bad footing because of delayed rainfall. The plantings were delayed and so far, the area planted and the expected maize harvest in the 2019/20 production season remains unclear but on the lower end.
Fortunately for Zimbabwean consumers, neighbouring South Africa and other major maize producing countries are expected to remain maize exporters in the 2020/21 marketing year (this corresponds with the 2019/20 production season). The locust infestation in East Africa could limit surpluses from that region, but overall global maize exports remain awash. For instance, at the Agricultural Business Chamber of South Africa (Agbiz), we estimate that South Africa could see its maize harvest improving by at least 11% from the 2018/19 season, reaching 12.5 million tonnes. Here we’ve applied the preliminary maize planting data of 2.5 million hectares (up 10% y/y), at an average yield of 5.0 tonnes per hectare, which is plausible with current soil moisture.
This means South Africa could have over a million tonnes for export markets in the 2020/21 marketing year, which starts in May 2020. Part of these supplies will help ease pressure on Zimbabwean consumers, and trade should be more free-flowing now with the GM ban having been lifted.
These measures could assist in the near term. In the long run, the Zimbabwean authorities should consider legalizing the growing of GM maize in order for domestic farmers to produce higher yields such as South Africa, Brazil, United States and other GM growing countries. The ultimate beneficiaries of such a policy shift would be consumers, as an increase in Zimbabwe’s maize production would lead to relatively lower prices. Moreover, in seasons of unfavourable weather conditions, GM crops wouldn’t be as badly affected as the conventional seeds that are currently grown in Zimbabwe. Indeed, necessity is the mother of invention.
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by Wandile Sihlobo | Feb 3, 2020 | Africa Focus
Nobel laureate, Paul Krugman, has popularized the term “zombie idea”, which is also a title of his new book – Arguing with Zombies. This term refers to “ideas that keep being killed by evidence, but nonetheless shamble relentlessly forward, essentially because they suit a political agenda”.
One such “zombie idea” in African agriculture is the view that Zimbabwe was a breadbasket of the continent. I keep hearing this from various corners (and here from the late President Robert Mugabe) although evidence shows Zimbabwe was never a breadbasket.
Fellow agricultural economist Sifiso Ntombela and I found in an Africa Check essay in 2017, aimed at assessing whether Zimbabwe was ever a bread basket for Africa that it was not. What we did find, however, was that Zimbabwe had been a self-sufficient food producer until its land reform programme was instituted.
In our view, a country should be able to meet its staple food consumption needs and simultaneously command a notable share in exports of the same food commodity to be considered a “bread basket”.
An examination of the production data from the UN’s Food and Agriculture Organization of key staple foods — maize and wheat — shows that Zimbabwe’s production of these commodities never surpassed a 10% contribution to Africa’s production over the past 55 years.
In the two decades prior to Mugabe’s leadership (1960–80), Zimbabwe provided an average share of 6% of Africa’s maize production — almost on par with Nigeria but lower than Kenya’s contribution of 7%. During that period, the country’s maize production outpaced consumption by an average 400,000 tonnes a year, making it a net exporter.
During the first half of Mugabe’s rule (1980-2000), the country’s maize production contributed a share of 5% to Africa’s output. While it was a net importer in most years, on average the country remained a net exporter of maize, with a declining maize trade balance. This decline, and the country’s trade balance, worsened following the introduction of Zimbabwe’s fast-track land reform programme in 2001.
The country’s share of maize production on the continent then dwindled to an average of 2%. During this period, its maize consumption outpaced production by an average of 550,000 tonnes per annum — turning it into a net importer. The trend is similar for wheat and other major grain commodities as a contribution to Africa’s food system.
Fails to fit the idea of food-basket
The available data, which covers three distinct phases in Zimbabwe’s agricultural sector, suggests that the country was self-sufficient before and in the two decades after Mugabe came to power. Even then, Zimbabwe’s maize and wheat output were generally modest and volatile. It wasn’t sufficient to support strong exports to the rest of the continent and world – which fails to fit the idea of a food-basket.
In the third phase, the country’s maize and wheat production significantly declined, which further weakened Zimbabwe’s standing in the continent’s food system.
Overall, we view Zimbabwe as a self-sufficient food producer prior to its fast-track land reform programme. However, there is limited evidence to support the notion of Zimbabwe having ever been “the breadbasket of Africa”.
This is an extract from an essay written for Africa Check, first published on 28 November 2017 here.
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by Wandile Sihlobo | Feb 2, 2020 | Africa Focus
Zimbabwe has always maintained a vague policy view on genetically modified crops (GM). In seasons of abundance, the country would place a ban on importation of GM crops, which would mean that South Africa, the only GM crop producer in Africa where roughly 80% of the maize is GM, wouldn’t be in a position to export maize to Zimbabwe.
In times of scarcity, however, one would see maize leaving South African silos into Zimbabwe without a clear view on the GM policy (it is possible that some exports were non-GM maize). The general view was that when the maize lands in Zimbabwe, it would be carefully quarantined and transported straight to the millers to be processed into maize meal
But the most notable shift from this vague policy happened recently. Bloomberg, a news organization, reports that;
“Zimbabwe has quietly lifted a ban on imports of genetically modified corn for the first time in 12 years as the southern African nation begins to take action to avert what could be its worst famine.”
This will help ease import processes of maize from South Africa, and other major maize producers, into Zimbabwe. As I’ve recently noted, in the week of January 24, 2020, South Africa had thus far exported 79 283 tonnes of maize to Zimbabwe within the 2019/20 marketing year.
The need for maize imports in Zimbabwe was caused by a poor domestic harvest, which fell by 53% year-on-year in 2018/19 production season to 800 000 tonnes, according to data from the U.S. Department of Agriculture. Zimbabwe consumes about 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 didn’t 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 witnessed from incidences of food shortages in the country. A more detailed view of this matter is here.
Additional reading:
Also, I’ve discussed the benefits of growing GM crops here. This is something that Zimbabwean authorities should think about if they are to transform the country’s agricultural sector in the coming years. The Economist magazine also recently ran a detailed piece on this matter here.
This chart of maize yields also paints a much clearer picture of the yield benefits of GM crops. Here is South Africa compared to the Sub-Saharan region.
Exhibit 1: The South African maize yields have largely benefited from the use of GM seeds.
Source: BMI
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by Wandile Sihlobo | Jan 31, 2020 | Africa Focus
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).
Exhibit 1: South Africa’s weekly maize exports to Zimbabwe
Source: SAGIS
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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by Wandile Sihlobo | Jan 11, 2020 | Africa Focus
Note: I’ve recently opened a YouTube channel, which I hope to use frequently in 2020. Click here for a short clip summarizing the essay below.
Last year I applauded the Zimbabwean government for having grasped the urgency of potential maize shortage in time and outlining a plan to address it. This is after Joseph Gondo, chief director of Zimbabwe’s agriculture ministry, told Bloomberg on June 6, 2019, that the country’s Grain Marketing Board, a state-owned agency, would float an international tender to import 750 000 tonnes of maize.
While this was set to be the largest maize import volume since 2016/17 season, it was somewhat less than what I thought the country needed to import in order to fulfil the shortage in the 2019/20 marketing year – a million tonnes. Nonetheless, I was encouraged by the proactiveness of the government.
The need for maize imports was caused by a poor domestic harvest, which fell by 53% year-on-year in 2018/19 production season to 800 000 tonnes, according to data from the U.S. Department of Agriculture.
The dearth of credible statistics of maize trade in Zimbabwe made it difficult for one to follow the planned import activity. But the news of food shortages in a country that has dominated headlines over the past few weeks show that the Grain Marketing Board didn’t really import the 750 000 tonnes that were planned on June 6, 2019. Had it been imported; Zimbabwe wouldn’t have faced maize (and food) shortages by now.
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 again, 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 1.1 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 second week of December 2019, South Africa had already exported 67% 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 32 124 tonnes of maize from South Africa between May and December 2019.
This means that South Africa and possibly Mexico have now relatively tighter stocks compared to mid-year 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.
Another likely source is Tanzania, which on September 20, 2019, sent its first consignment of maize to Zimbabwe, about 1 200 tonnes.
What worries me more is that the current struggle of maize shortage in Zimbabwe could be prolonged. The 2019/20 production year crop outlook points to a possibility of another poor harvest because of a second consecutive year of below-normal rainfall. Furthermore, a recent report from the Group on Earth Observations Global Agricultural Monitoring Initiative indicates a high probability of below-normal rainfall in Southern Africa between December 2019 and February 2020. This is a period where maize crop needs higher moisture as it would be at pollination.
As these weather indications appear, it would be better this time around if the Zimbabwean government and the World Food Programme do no only notice and make public statements about the possible dangers of this scenario, but plan ahead. As things stand, it is plausible that the discussion of Zimbabwe’s food shortage could persist until the first quarter of 2021.
Written for and first published on Business Day on 07 January 2020.
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