Africa Newsletter 07-31-20

East Africa Update

Fear of looming maize shortage pushes price up in Kenya

Managers of the Strategic Food Reserve (SFR) stated that they might not realize the target of buying four million bags of maize this season after farmers opted to sell the produce to millers who are bidding as high as Sh3,400 per 90 kg bag.

The anticipated shortage of maize occasioned by a drop in production by 11 million bags last season has seen millers flock to markets in the North Rift region, the country’s food basket, in panic buying to stockpile the staple.

Kenya Price Updates

Maize is currently trading at KES 3,300 per 90 kg bag in Nairobi and soybeans are still trading between KES 50-52 per kg from December 2019.

Uganda Market Update

The long Ugandan season has started to see favorable weather for drying conditions as maize is trading at UGX 1,050 per kg in Kampala while trading at UGX 950 per kg in the Bweyale and Masindi area.

Grain prices are expected to fall towards the end of January as more of the new crop enters the market. Soybeans are trading at UGX 1,650 per kg ex-warehouse Kampala and sesame seeds are still being priced at UGX 4,000 per kg delivered Kampala.

Rain and higher food prices usher the new year in Tanzania

Tanzanians ushered in 2020 having to dig deeper into their pockets for basic foodstuffs. Traders are blaming the surge in prices on heavy rain that has been pounding several regions of the country.

Wholesale prices for food items have gone up with maize prices rising from Tsh100,000 ($43.35) per 100kg bag to Tsh110,000 ($47.68); Rice from Tsh190,000 ($82.36) to Tsh220,000 ($95.37) per 100kg; and beans from Tsh230,000 ($99.70) to Tsh280,000 ($121.38) per 100kg.

Maize Warehouse Receipt System To Start in October

As an alternative to the state buying maize grain from the National Cereals and Produce Board (NCPB), the government in Kenya has announced that a warehouse receipt system will start its operation for the October harvest and this is intended to create more market transparency for farmers.

The Business Daily reports on the government’s new initiative, which was passed by parliament in June last year as the Warehouse Receipts Systems Act 2019 with the establishment of its regulation and also a Warehouse Receipts Systems Council. Last year an estimated 10 million bags were lost due to post-harvest handling and it is also estimated that up to 30 percent of farmer’s crop is lost in the post handling process.

The new system will help reduce losses in post handling, support farmers with access to funds, alleviate any bottlenecks in the supply chain, and offer better quality maize for the market across the country.

Uganda Market Update

The new crop maize is still trading between UGX 750-800 per kg in the Greater Kampala area while the older crop is at UGX 850 per kg. More grain coming into the market is dry as the weather has become favorable for drying in the growing regions. Maize bran is still quoted at UGX 550 per kg and maize flour remains steady at UGX 2,000 per kg. The millers are hoping for further easing in the current lockdown to increase sales to schools and other institutions that are currently closed.

White sorghum is trading at UGX 1,100 per kg while soybeans remain at UGX 1,350 per kg and nambale beans are being quoted at UGX 3,300 per kg in the Greater Kampala area.

Zimbabwe To Compensate Farmers

The Commercial Farmers Union’s long-standing battle with the Zimbabwe government over the seizure of vast farms in the country has come to an end as the government in Harare has formally agreed to pay 3.5 billion dollars in compensation according to The East African.

The land seizures started in 2000 which saw over 4,500 white Zimbabweans displaced from commercial farms and were taken over by landless blacks that saw the government support this move after many years of a claim to land reform since its independence from the UK in 1980.

The country’s economy is currently in a bad state and is unable to make large payouts but solutions such as bonds have been presented. The government was under pressure from the UK, the United States, the European Union, the World Bank, and the IMF after pre-conditions were set to re-engage and to potentially normalize relations, and the compensation to the farmers was one of the key points. The Commercial Farmers Union had been demanding 7 billion dollars in compensation.

For updates on restarting the global trade please see our report Hot Commodities at panxchange.com/hot-commodities