SOUTHERN AFRICA: Feeling the bite of rising food prices

Monday, March 31, 2008

With no end in sight to rising global food prices, families across southern Africa are being forced to tighten their belts.

“Everything is very expensive - we are now living on borrowed money,” Towela Ngwira, a shopper at a market in Zambia’s capital, Lusaka, told IRIN. “For us it is no longer hand-to-mouth but hand-to-hand because all the money we get has to be given to someone else [from whom we borrowed].”

Ngwira, who takes care of four children, said she has had to make drastic changes to her household’s shopping basket. “We are now surviving on dry foods such as Kapenta [sardines], dry fish, and dry beans, because fresh foods are very expensive. We have even stopped buying bread for breakfast - it’s too expensive for us.”

According to André Jooste, senior manager of market and economic research at South Africa’s National Agricultural Marketing Council, although the poor are inevitably the hardest hit, even professional urbanites are beginning to feel the squeeze.

“[The] middle-class will start changing their buying patterns, moving away from special products to [cheaper] alternatives. They will have to,” he said. “Food prices will level off but will continue to experience upward pressure.”

This week South Africa, the regional economic giant, released figures showing the annual consumer price index for food, a measure of food price inflation, had increased to 14.1 percent.

According to the UN’s Food and Agriculture Organisation (FAO), the global picture is even bleaker: FAO’s global food price index rose 40 percent in 2007 compared to 9 percent in 2006.

Global economics

The causes are global. Worldwide food stocks have hit historic lows, while demand has never been higher. The combination has resulted in prices of basic staples such as wheat, corn and rice hitting record highs, up 50 percent or more in the past six months.

On the demand side, population growth and economic success in developing countries, particularly China and India, have drastically increased disposable incomes. The effects have been an overall increase in demand and “peoples diets are changing – demanding more meat and dairy products,” which are more resource intensive to produce than the traditional staple of the poor, Jooste explained.

Major weather related phenomenon such as cyclones, droughts and flooding have ravaged harvests in key producing countries throughout the world meaning supply has dropped. And the advent of the biofuel industry has seen more and more agricultural land being set aside for bio-ethanol production.

Local problems

In Malawi’s southern town of Zomba, Harrison Kumwenda has seen the produce from his one and a half acre plot fall by more than half. He blames a combination of expensive fertiliser, and the weather. His district received abnormally high rainfall from November to February, “which resulted in floods washing away our crops.”

In a good year Kumwenda would harvest around 15 50-kg bags of maize. But, “I have a wife and three children and we would need up to 30 bags to get to the next growing season”, he explained. The deficit would traditionally be made up by seasonal wage labour.

“We were buying a bag of 50kg of maize at the price of K800 (US$ 5.8) in December but the vendors are selling a bag of 50kg at K3,000 (US$ 22) which is very high”.

Malawi met its own food needs for the first time in years in 2006, followed by a bumper harvest in 2007. But even though the country is expecting a surplus for 2008, pockets of food security will remain.

No sharing in tough times

Poor regional infrastructure and unprecedented high prices for fuel have made transport between surplus and deficit areas unprofitable, Jooste commented. After successive years of poor harvests across the region, government’s are now more inclined to build domestic food reserves rather than export.

In Zambia, the authorities “have decided to restrict the export of maize only to countries that have active contracts with us until we ascertain the quantity of maize stocks in the country,” Sara Sayifwanda, Zambia’s minister of agriculture, told IRIN.

“It is important for us to take precautions because we don’t know [as yet] how exactly this harvest season will be; we may have maize shortages in certain places.”

Zimbabwe, Zambia, Namibia, Angola, Malawi – and especially Mozambique – were badly hit by flooding this season, which according to the UN’s Office for the Coordination of Humanitarian Affairs, affected close to 1 million people.

Peter Cottan, vice president of the Millers Association of Zambia, said some millers had started hoarding their maize stocks in anticipation of a shortage. “We expect the prices to even go higher,” he said.

The Basic Needs Basket, an index of market prices compiled monthly by a local faith-based think-tank, the Jesuit Centre for Theological Reflections (JCTR) in Zambia, has shown an unprecedented increase in the cost of basic food items: the average monthly cost rose by 10 percent from January to February.

“The obvious and common underlying factor... has to do with how much is available on the market,” JCTR spokesperson, Miniva Chibuye, explained. “The current upward trends in food prices pose serious challenges to human development and require that strategic planning and responses begin now.”

Source: IRIN