Africa Business Blog

Zambia turns to East Africa for its excess maize

Zambian grain traders are expected to sell off 382,640 tonnes of white maize to East African countries in a deal worth US$100 million.
Other produces expected to be exported to east African markets, including Kenya and Uganda, are soya beans and wheat.

The lucrative contract was clinched in Lusaka during the Regional Trade Facilitation Forum organised by the Eastern Africa Grain Council and Zambia Commodity Exchange with support of USAID’s East Africa Trade and Investment Hub and USAID’s Southern Africa Trade and Investment Hub.

A total of 195 traders in agricultural produce such as maize, soya beans, common beans, millet and other grain commodities from Burundi, Malawi, South Africa, Kenya, Uganda, Rwanda, Zambia and Zimbabwe meet during the forum agree on various contracts at which various crops will be traded among the countries.

The agreement will help countries like Uganda to restock on maize and soybeans after a poor harvest resulting from erratic rains experienced during the planting season in 2016, coupled with an export ban of food grains imposed by Tanzania.

Zambia has been forced to look east, after her traditional customers in the region – Zimbabwe, Malawi and Namibia – recorded good yields of maize and other horticultural produce.

The decision to sell maize to East Africa came after the Zambian government announced that it will lift the 10 percent levy taxed on all maize imports.

“We have decided to look to East Africa for our exports of various crops because most of our regional neighbours have had positive yields,” Inonge Wina, Zambia’s Vice President, stated last week.

Finance minister Felix Mutati said the decision to rescind the imposition of the 10 percent tax on maize exports was to assist local farmers to export excess grain as well as create space for storage of the oncoming crop from the projected 3.6 million tonnes of maize to be harvested this year.

“As a government we declare that we will no longer have any export bans and we announce the removal of 10 percent export tax on all grain commodities,”

According to the terms of the sale agreement, Kenya seeks to secure 55,000 tonnes of white maize from Zambia following a poor harvest last year resulting from erratic rains experienced during the planting season in 2016.

This follows Tanzania’s closure of its border with Kenya and refusal to sell some of its grain to the neighbouring country to protect its limited stocks. Uganda is also formalising the quantity of maize it seeks to import from Zambia.

Kenya’s director of crops at the Ministry of Agriculture, Johnson Irungu, had earlier said that the country was in talks with Dar es Salaam to allow for the passage of the grains.

Zambia produced about 3.6 million tonnes of maize during the 2016/17 season and has a surplus of 1.4 million tonnes, which is available for export.
Last month, Kenya turned to Uganda, importing more than 45,000 tonnes as at Friday, totalling $26.3 million, data from the Regional Agriculture Trade
Intelligence Network shows.

Kenya has introduced a $60 subsidy meant to lower the price of a 90 kg bag of maize to $23 from the current $40, allowing the 2kg packet of flour to sell for $0.9 a packet.

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