Large cross-border informal food trade recorded

Some 102,000 mt of maize was traded informally across Southern African borders between July 2004 and the March 2005, according to the Famine Early Warning System Network (FEWS NET). The latest bulletin by FEWS NET's monitoring initiative noted that 17,000 mt of rice and 17,000 mt of beans had also crossed national borders in informal trade by the end of the agricultural marketing season last month. The products were traded among six monitored countries: Mozambique, Malawi, Tanzania, Zambia, Democratic Republic of Congo and Zimbabwe. FEWS NET observed that "Malawi has benefited the most from the trade, importing nearly 76,000 mt, largely from Mozambique (71,000 mt)". "Zimbabwe was the second biggest importer at 13,000 mt, entirely from Zambia ... the flow of trade was in the expected direction, as both Malawi and Zimbabwe had cereal deficits, whereas the major exporters, Mozambique and Zambia, had above average harvests," the bulletin said. "The large informal imports by Malawi have significantly ameliorated the food insecurity situation in that country, and have helped to keep consumer prices at relatively low levels," the report added. The monitoring system postulated that "the large volumes of informal imports may also have influenced the Malawi government to reduce by half its programme to import 70,000 mt of maize for commercial sale". However, "informal maize exports into Zimbabwe could have been much higher had the country not imposed restrictive taxes and levies, which only favoured the state owned Grain Marketing Board for imports. This could also have contributed to generally higher consumer prices in the country", the report noted. Zimbabwe has a larger cereal deficit than Malawi. With regard to prospects for informal maize trade in the 2005/06 marketing year, starting in April, "the volumes traded and direction of trade could both change significantly due to the export ban imposed by Zambia ... until conclusive harvest assessments are available. Early assessments, however, indicate a poor harvest due to, among other things, a mid-season drought in the southern parts of the country," FEWS NET said. "Malawi is likely to continue to informally import maize from Mozambique, although the volumes could be less than last season. Surpluses in northern Mozambique are likely to be somewhat smaller than last year due to erratic rains. Relative prices will determine the direction the Mozambican surpluses will flow. If the expected poor harvest in Malawi leads to significant price increases, Mozambican maize will flow into the country due to the proximity and historical linkages," the bulletin predicted. However, it noted that "poor harvests in other parts of central and southern Mozambique may exert a strong pull on supplies" that would otherwise be destined for Malawi. "There is also a possibility of increased trade between northern Tete Province of Mozambique and parts of eastern Zambia. These borders are not currently monitored by the cross-border trade initiative, but efforts will be made to include them in the system before the main marketing season begins. In view of the Zambian export ban, Zimbabwean traders would have to compete with internal urban consumers of Mozambique for maize produced in central Mozambique. However, given the stringent trade barriers in Zimbabwe, informal maize imports from Mozambique remain unlikely," the report concluded.