Grain prices double on drought effects
Isaac Pinielo | Friday June 17, 2016 14:27
He said the maize prices have more than doubled from the previous year, which will ultimately lead to the rise in food prices.
“Food prices will also rise as a result of these rising grain prices. The final consumer will find it more expensive at retail shelf to buy maize-meal and sorghum meal,” Seitshiro said.
He asserted that it is very likely that the rising grain prices could trigger an increase in poverty rates since it will be expensive for an average Motswana to buy the basic staple food.
“The final consumer is the ultimate loser in this situation. Though everybody in the value chain also feels the pinch of the price rise,” he said.
A research analyst at Motswedi Securities, Garry Juma said the rising grain prices are “very scary”, noting however that they had anticipated it.
“We saw it coming when we predicted last year that the prices of grain would double this year. At the time, a bag of maize meal was around P55 but now it hovers around P85 and above,” he said.
According to Juma, the impact of the grain prices will mostly be felt around September and October, which he described as the ‘hunger months’.
He indicated that the situation will push inflation numbers up, adding that the people that will mostly be affected are those in the low-end salary category because they spend most of their money on food.
An El Nino-induced drought is shrinking grain production across southern Africa and increasing the risk of hunger for some of the world’s poorest populations.
It has been more than a century since fields were this dry in South Africa, the continent’s biggest corn grower and traditional supplier to its neighbours along with Zambia.
Earlier this year, Botswana Millers Association chairman Nkosi Mwaba was quoted as saying that while local corn-meal supply would remain stable this year, prices will rise by 25% to 30% due to premiums paid for imports.
Figures released by SADC on Wednesday show that an estimated 41 million people - 23% of the 181 million rural population in the Southern African Development Community (SADC) are food insecure, and out of this figure, more than 21 million are in urgent need of assistance.
This is according to the Vulnerability Assessment Results released on June 10, 2016 at the 10th SADC Meeting of Regional Vulnerability Assessment and Analysis (RVAA) held in Pretoria, South Africa.
“We are deeply concerned about the scale of food insecurity in the region. We are experiencing the worst drought in the last 35 years. I call upon Member States and our development partners to act now, to avoid a further deterioration of the situation. People continue to lose their means of survival and we can lose lives if we do not act now,” said SADC Director for Food, Agriculture and Natural Resources, Margaret Nyirenda.
The SADC region has been hit by a devastating El Niño-induced drought, the worst in 35 years, following the failure of two consecutive rainy seasons.
The severe drought conditions have already taken toll on lives and livelihoods and the situation could deteriorate further if urgent assistance is not provided.
The severe drought conditions have resulted in widespread crop failure and a decrease in cultivated area. Cereal harvest assessments indicate a nearly 9.6 million metric tonne shortfall in production, with only 72% of required cereals available in the region (excluding DRC, Madagascar, Mauritius, Seychelles and Tanzania).
South Africa, usually the main producer of maize in the region, is facing an estimated 2.6 million metric tonnes of deficit.
Food prices continue to spike. However, Zambia is the only country currently forecasting a cereal surplus (556,000 tons) during the 2016/17 marketing year.