I keep a close eye on the Zimbabwe agricultural sector because of its potential impact on regional demand. Since the collapse of the sector after the land reform programme in the early 2000s, the country has been one of the key markets for South African maize.
On average, South Africa's maize exports to Zimbabwe accounted for nearly a third of overall maize exports between 2001 and 2017, according to Trade Map data. This came to a halt in October, when Zimbabwe banned maize imports after a recovery in domestic production to 2.2 million tons - its largest harvest in 23 years.
However, this season's production estimates point to a lower harvest.
Recent data from the US Department of Agriculture shows that Zimbabwe's 2017-18 maize production could reach 1.2 million tons, 46% lower than last season's bumper crop. This is largely due to a reduction in area planted, lower yields in some areas and unfavourable weather early in the season.
The expected decline puts the country in a net importing position, but it might not require the large volume seen in the past couple of years as the expected harvest is still higher than some years before the drought of 2015-16. Moreover, if the Zimbabwe Grain Marketing Board is to be relied on, there are about 500 000 tons of maize from the previous season. This means the total supply for the 2018-19 marketing year could amount to about 1.7 million tons.
Given that Zimbabwe's annual maize consumption could vary between 1.8 million and 1.9 million tons, the country will still need to import to supplement domestic supplies, so the government would have to lift the maize import ban. This presents a small window of opportunity for South African farmers and traders to exploit.
The volume available is not large – about 720 000 tons, according to national supply and demand estimates committee data. The rest of the estimated 2.4 million tons of maize exports for the 2018-19 marketing year is yellow maize, which should flow to the world market. A large share of white maize exports may go to other regional markets.
It is worth noting that there might be limited competition in the 2018-19 marketing year in traditional African export markets from countries such as Zambia and Malawi. They are set to record a decline in maize production.
South Africa will also record a decline in production from last season's record, but there will still be large supplies. This week, the crop estimates committee lifted its estimate from last month for 2017-18 maize production by 2% to 13.2 million tons.
Considering the domestic annual maize need of about 10.8 million tons, on the back of expected production coupled with an opening stock of 3.7 million tons, South Africa could see maize exports exceed the aforementioned estimate of 2.4 million tons in the 2018-19 marketing year, which ends on April 30.
Overall, the key fact is that Zimbabwe will again be a net importer of maize in the 2018-19 marketing year.
Most important, South African maize traders and farmers will have to look further afield for maize export markets, as the surplus might not all be absorbed by regional markets.
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