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Southern Africa

Prices of maize remain significantly higher than a year earlier

12/03/2019

Prices of maize followed mixed trends across the countries in the subregion but remained overall well above their year-earlier levels mainly due to tight market availabilities. In South Africa, prices of maize declined in February after the sharp rises in the preceding two months. The recent declines were driven by beneficial rains that partly offset the effects of earlier precipitation deficits, raising production prospects for the 2019 crop. Prices, however, remained higher than a year earlier mainly supported by the sharp drop in the 2018 output. Regarding wheat, prices remained firm reflecting lower international quotations, given the country’s dependency on imports. By contrast, prices of maize grain and maize products continued to rise in Malawi and Zambia and were well above their year-earlier levels. Reduced domestic supplies were the main factor driving up prices in the last months, while in Zambia a weaker currency exerted further upward pressure. In Mozambique, prices of maize rose moderately in February and were higher year on year. In Zimbabwe, prices of wheat flour continued to rise steeply in January due to the lingering effects of the economic shocks that significantly raised production costs and caused supply shortages. Prices of maize meal also increased, but to a lesser extent than in the past months, as a result of generally satisfactory domestic supplies and subsidized sales from the Grain Marketing Board. In Eswatini, which is dependent on imports, prices of maize meal remained virtually unchanged in January and down from a year earlier on account of market controls for the key food staple, which have so far diminished the impact of higher prices in subregional markets. In addition, a favourable production outlook for the 2019 maize crop contributed to the price stability. Similarly, in Namibia, prices of maize meal remained relatively stable but were higher on a yearly basis reflecting quotations in South Africa, its main source of imports. In these two countries, which are net importers of wheat, prices of wheat products were at elevated levels in January mostly due to weaker currencies and higher international quotations from the European countries, the key suppliers. In Madagascar, prices of rice declined in February and were below their year-earlier levels. The recent declines follow the arrival of new supplies from the minor season harvest that boosted market availabilities, while a small appreciation of the currency and lower international quotations exerted downward pressure on prices of imported rice.