Cross border trade plays role in filling food gap

As Southern Africa heads towards the traditional lean season between harvests, informal cross-border trade in maize, rice and beans has started levelling off in the past few months. The Famine Early Warning Systems Network (FEWSNET) and World Food Programme (WFP) informal cross-border food trade report noted that "by August the ... monitoring system had captured close to 83,000 mt of trade in maize, rice and beans since the start of the 2005/06 marketing year in April". Although informal trade in August was 10 percent higher than at the same time last year, there was a decline in the month-to-month increase in the volume of commodities traded. This reflected "dwindling supplies as the marketing season moves further away from the harvest period, signalling the approach of the lean season in most of the monitored countries. The general indication is that the month of August could become the peak trading period, mirroring the pattern of the last season", the report observed. The monitoring system noted that informal imports into Malawi from Mozambique remained steady, while both formal and informal maize exports from South Africa to Zimbabwe continued to rise. Despite the much larger cereal deficits this year in both Zimbabwe (1.2 million mt) and Malawi (450,000 mt), the overall volumes of informal cross-border trade in maize, the regional staple food, were "not substantially higher than last year's". "This could reflect several issues, including better national responses through formal imports, tighter supplies in the exporting countries, and the inability of informal traders to buy significantly higher volumes than dictated by the deficit (as a result of higher prices at source)," the authors explained. Regarding formal imports into grain-deficit countries, the report quoted the South African Grain Information Service as saying that by the end of August, the Grain Marketing Board (GMB) of Zimbabwe had imported 403,000 mt from South Africa. "Zimbabwe is importing South African maize at an average rate of 86,000 mt per month, a rate which is 28 percent below the planned monthly import of 120,000 mt per month. Zimbabwe requires a total of 1.2 million mt of maize before the next harvest," the researchers commented. On the other hand, the Malawi government's maize import programme covering 90,000 mt slowed down in August. "Only 666 mt were officially imported from South Africa, bringing the total since April to 5,000 mt". However, informal imports into Malawi from Mozambique since April stood at nearly 51,000 mt, and the Malawi government was expected to speed up its formal import programme during September. "In addition to the import programme, the government recently announced a local tender for supply of maize and is inviting bids from local suppliers. Given the poor harvest in the country it is likely that the majority of the local bidders would have sourced their maize from Mozambique through the informal trade. In a move aimed at filling the 186,000 mt maize deficit, the Zambian government has announced a 200,000 mt official maize import programme that is expected to source the commodity from South Africa and Tanzania," the trade monitors explained. Retail prices for maize in areas around the monitored border points showed rising prices in southern Malawi and northern Mozambique, stable prices along the Democratic Republic of Congo border points, and a drop for northern Malawi, northern Zambia and central Mozambique. "The retail price dynamics along the actively trading Malawi and Mozambique borders, and Tanzania borders with Malawi and Zambia, are reflective of the supply and demand situation. The continuous retail price increases in southern Malawi are indicative of a rapidly deteriorating food supply situation in the area," the report warned.