Minimal acute food insecurity expected through end of the lean season

• Minimal (IPC Phase 1) acute food insecurity outcomes are likely for the duration of the outlook period. This is supported by the good harvest from the 2014/15 production which will see a milder lean season. Own produced staple food will be available to rural households a little longer than usual and therefore demand from the market will start increasing in December as opposed to October.

• Maize prices, which had remained higher than expected in the midst of a large surplus, started declining from mid-September into October. This was attributed to reduced offer price by millers and the urgency by farmers to get cash to access much-needed inputs for the coming production season. Meal prices in the coming months will largely depend on the Food Reserve Agency (FRA) maize selling price.

• The 2014/15 seasonal forecast released by the Meteorology Department in September indicated a high likelihood of Zambia receiving normal to above normal rainfall. Therefore, the season is likely to start on time, but there is also an increased chance of localized flooding in the flood-prone areas of Western and North- western Provinces.

Current Situation

• Zambia continues experiencing Minimal (IPC Phase 1) acute food insecurity outcomes following a good harvest, with the staple food (maize) estimated at a record high of 3.35 million MT. Although seasonal foods have started typically reducing, in general staple food at the household level is still available in most rural areas and this is supported by the relatively low demand from the market.
• Despite the Vulnerability Assessment Committee (VAC) findings establishing that 351,000 people will require food assistance from August 2014 to March 2015, there have been no formal requests for food assistance from the 18 districts of concern, most of which are in Western Province. This suggests that in these areas of concern, the situation is still stable. The only request from the field has been from Luano (valley area of Mkushi district, Central Province) a marginal producing area. In view of the good supply of maize on the market, the VAC has recommended use of cash transfer as opposed to the usual food relief distribution for arising food relief needs and the modalities are still being put in place.
• Following large sales to the FRA, and to a lesser extent the traders and millers, maize stocks with farmers have declined as evidenced by the significantly reduced supply to urban public markets. Although there are a few districts with relatively large maize stocks for sale such as Choma (Southern Province) most small-scale traders indicate that they will wind up maize purchases by end of October. The FRA ended their purchase program on October 7^th, a week later than usual. Most of the stock is in the hands of the FRA, which has purchased an estimated 1 million MT and have on hand carryover stocks of 342,000MT.
• Despite the above-target purchases by the FRA at above-market price, prices (wholesale) at which traders were buying maize from farmers mostly dropped from mid-September into October. The small traders who are currently the major suppliers of maize to millers were forced to reduce prices as millers (mostly in Lusaka) reportedly reduced their buying price from K1.4/Kg to K1.3/Kg. Small traders are buying at around K1.1/Kg in most areas with the exception of the Copperbelt Province, where prices are higher at K1.2/Kg as millers there are offering a higher price (K1.4/Kg). The maize and meal retail prices are closing in to price levels of the previous season, but still much above the five-year average. Compared to the month of August, retail prices remained mostly stable in September, an indication of continued relatively low demand and stable market supply.
• Formal maize exports have remained limited given the good regional harvest and therefore reduced demand coupled with the high price of Zambian maize. Informal maize exports to DRC has been following the seasonal trend and has started to decline, while monitored exports to Tanzania (via Nakonde border) destined for the Kenya decreased from 523 MT to 161 MT due to reduced demand resulting in a 30 percent price drop. Maize inflow from Mozambique also decreased by 60 percent due to reduced trader activities in light of the elections in Mozambique.

National Level Assumptions

The October 2014 to March 2015 Food Security Outlook report is based on the following national-level assumptions:

• Staple food availability: Supplies of staple foods in country will be above average given the 3.35 million MT estimated maize production, which is 28 percent above average. Therefore, during the October to March period, staple food will be adequately available on the market to meet the demand. Market dependency will increase by December as household stocks run out and the rainy season gets underway, limiting amounts safely stored given the low household storage capacity.
• Maize market and prices: The Food Reserve Agency (FRA), which planned to purchase 500,000 MT of maize for strategic reserves, had purchased about 1 million MT by October 7^th (closing date). With the 342,000MT carry overstock, the agency has maize stocks of over 1 million MT. This implies that the FRA is holding about 80 percent of the surplus maize and therefore will be actively selling maize on the market in the coming months directly competing with the traders for the same limited market. With government trying to bring maize meal prices down, there is a likelihood of the Government requesting FRA to sell below the purchase price of K70/ 50 kg to the millers once they enter the market.
• Although maize prices are expected to fall during the October to November period due to panic selling by farmers in order to acquire inputs for the 2014/15 season, they will remain above the five-year average.
• In view of the large purchases by FRA which is above their storage capacity, large storage losses are expected given limited safe storage available to the Agency.
• Maize flows and trade: Zambia’s maize export opportunities will remain constrained as long as maize import ban imposed by Zimbabwe, its key maize export market, is in effect. Furthermore, the high price of maize in Zambia makes it uncompetitive making south Africa a cheaper source in the region. Good harvests in neighboring countries, and the high prices of maize maintained will likely reduce the amount of maize Zambia can export regionally. Informal exports to the DRC will follow typical trends, falling during the October to March period after peaking in August/September while prices will remain much below those of the previous season.
• Labor opportunities: With the good harvest and therefore increased food stocks for the better off, it is expected that both agricultural and non-agricultural labour opportunities will be typical for the October to March period. Labor demand will typically peak from October (land preparation) to December (planting period) when poorer households mostly depend on working for the better-off to meet their basic food needs through in-kind and cash receipts.
• Agro climatology: The seasonal forecast released by the Department of Meteorology indicated a high likelihood of Zambia receiving normal to above normal rains for the 2014/15 season. In view of this forecast it is likely that the season will start on time. There is also a likelihood of localized flash floods in flood prone areas of Western and North- western Provinces.

Most Likely Food Security Outcomes

During the outlook period, Minimal (IPC Phase 1) acute food insecurity outcomes are expected to continue. The good 2014 harvest increased basic food access for rural households. Consequently, households will rely on own harvests a little longer than usual with market reliance only increasing in December rather than October. The lean season (November to February) is expected to be milder than usual. Supply of the staple food on the market will remain good throughout the October to March period. As labor opportunities are expected to be good, poorer households will benefit from in-kind and cash payments during the peak agricultural labor period of October to December and a combination of agricultural and non-agricultural labor in the January to March period.

With the large in-country supply of maize, and limited regional market, maize prices that normally start increasing in October, will instead temporarily decline in October/November period. This is supported by the fact that the primary suppliers (small-scale farmers) will become desperate to offload their remaining surplus maize to traders for immediate cash to purchase inputs before the rainy season gets underway. Additionally, they will not want to risk large grain losses due to poor inadequate storage facilities at household level.

Maize prices are expected to fall between October and November as farmers desperately sell their remaining surplus grain before the rainy season starts, but edge upwards in December as supply from small scale producers diminishes. Maize meal prices on the other hand will likely remain relatively stable until December when they will start going up as demand from the market starts increasing. With most of the maize is in the hands of the FRA, after December, staple food prices will depend largely on when the Agency enters the market to sell and the sales price. However, throughout the outlook, maize and meal prices are likely to remain above the five year average given the increased cost of production and marketing. In order to avoid increased maize meal prices; it is likely that the FRA will be requested by government to sell the maize below the purchase price of K70/50Kg to the millers during the January to March period. Maize meal prices will likely stabilize during that period but still remain above the recent five year average.

The regional market for maize will likely remain limited given the good harvest in most of the Southern African countries sustaining good local supplies. Additionally, WFP purchases are also likely to remain limited given the good regional supply.