FAO warns of high food prices
Published On August 16, 2015 » 1410 Views» By Davies M.M Chanda » Business, Stories
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By CHARITY MOONGA –
THE United Nations Food and Agriculture Organisation (FAO) has warned of sharp food price increases and an increase in the need for imports in Southern Africa this year because of the low maize harvests in the previous season.
Regional maize output this year is forecast at 21.1 million tonnes, or 15 per cent lower than the five-year average.
This is according to the latest release of the monthly FAO Food Price Index (FPI) and the new edition of the quarterly Crop Prospects and Food Situation report, both issued last month.
According to the reports, the maize harvest in Southern Africa is expected to shrink this year by approximately 26 per cent compared to 2014’s bumper crop.
“This would be a situation that could trigger food price increases and adversely impact recent food security gains, the organisation states,” the reports say.
Botswana said crops were showing signs of “total failure” due to below-average rainfall, while floods in Malawi and Mozambique have curbed production.
“The bulk of the growth in imports is expected from South Africa, mainly consisting of yellow maize used in the feed industry,” the FAO said.
Maize imports for the year through April 30, 2016, may rise to about 1.8 million tons, or “double the low level of 2014-15 and one-third above the average. Price increases are expected to mostly affect those countries that rely more on maize imports such as Namibia,” the report says.
South African prices of white corn, has climbed 21 percent this year.
The yellow type, which is used as animal feed, rose 8.8 percent in the same period.
According to the reports, Zambia and Malawi’s 2015 maize harvests are estimated to be 21 and 26 percent below 2014, and rainfall deficits have severely impacted maize production in the import-dependent countries of Lesotho, Namibia, Botswana and Swaziland, with declines ranging from 13 to 43 percent.
“These trends are expected to negatively impact  on availability of cereal exports to cereal deficit neighbouring countries such as Zimbabwe, where maize output is expected to fall by half.
“Compared to the low level of the previous year, the number of people in need of assistance for food is set to increase,” the reports say.
According to the FAO, World crop prospects are still positive in 2015 but food insecurity hotspots are posing concerns.
At global level, FAO says that Global Food Price Index (FPI) fell in June and cereal production is forecast to be strong despite El Niño
The report says that global world cereal production this year should amount to 2, 527 million tonnes.
That represents a 1.1 percent decline from the record level in 2014, but an improvement from projections made last month.
The FPI declined 0.9 per cent in June compared to May.
At 165.1 points, the index is now down 21 percent compared to a year ago and at its lowest level since September 2009.
The decline in the FAO FPI mainly came as a result of a drop of 6.6 percent in the price of sugar and of 4.1 per cent in the prices of dairy products, which more than offset a rebound in palm oil and wheat quotations.
Increasing worldwide demand for livestock feed, especially in Brazil, China and the United States, is supporting prices for coarse grains, including maize.
According to FAO, the carry-over stocks from 2014’s bumper maize crop is expected to partly offset the impact of lower domestic production and somewhat contribute to stabilizing national supplies in some countries.

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