Required Report - public distribution

**Date:** 6/1/2007

**GAIN Report Number:** RH7007

SF0000

**Zimbabwe, Republic of**

**Grain and Feed**

**Voluntary**

**2007**

**Approved by:**

![](media/image1.wmf)Scott Reynolds

U.S. Embassy

**Prepared by:**

Patricia Mabiletsa

**Report Highlights:**

Zimbabwe's 2007/8 corn harvest is expected to remain the same as the
previous estimate at 600,000 MT, which is about 43% of the expected
national requirement. The decline in output is because of drought and
shortage of critical inputs. However, the country's ability to import
enough corn to cover the food deficit will be seriously constrained by
the critical shortage of foreign currency facing the country. Winter
wheat is expected to reach less than 35,000 Ha, because the area already
planted totaled 18,000 Ha on May 25, 2007, compared to the government's
expectation of 75,000 Ha. Zimbabwe expects to import a total of 215,000
MT of wheat in MY 2007/8 to augment local production and meet the
national requirement.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Unscheduled Report

Pretoria \[RH1\]

\[RH\]

Table of Contents

[Executive Summary 3](#executive-summary)

[CORN 4](#corn)

[Production 4](#production)

[Consumption 5](#consumption)

[Trade 5](#trade)

[WHEAT 6](#wheat)

[Production 7](#production-1)

[Consumption 8](#consumption-1)

[Trade 8](#trade-1)

# Executive Summary

##### 

Zimbabwe's rainfall season has ended, and only the northern areas,
mainly the corn area, received fairly good rains. However, the areas to
the south of Harare experienced widespread corn crop failure because of
a prolonged drought, especially during the second half of the season.
The Zimbabwe Electricity Supply Authority (ZESA), which is the power
utility firm, expects to supply consistent and reliable power to the
wheat farming areas, to ensure that the wheat irrigation schedules are
not hindered by erratic power, as was the case in previous seasons.

The 2007 national corn harvest is expected to total 600,000MT, which is
about 43% of national requirements expected around 1.4 million MT.
Zimbabwe's corn deficit in MY 2007/8 is expected at 800,000MT. The
government expects to augment the deficit through imports, although its
ability to import enough corn to cover the food deficit will be
seriously constrained by the critical shortage of foreign currency
facing the country.

The Zimbabwean government expected the 2007 winter wheat plantings to
total 75,000 hectares because of enough available seed stocks. However,
the actual total area planted will not likely exceed 35,000 Ha, because
the wheat area already planted reached only about 18,000 hectares in May
25,2007 (AREX estimates).

Zimbabwe expects to import a total 215,000 MT of wheat in MY 2007/8 to
augment local production and meet the national requirement.

The joint World Food Program (WFP)/ Food and Agriculture Organization
(FAO)field crop assessments as part of the crop and food security
assessment mission (CFSAM) were completed around Mid-May. It is hoped
that the final report will be available in early June.

Exchange rate: Z\$250 = US\$1 (official)

Z\$38,000 = US\$1 (parallel market)

# CORN

# 

<table>
<colgroup>
<col style="width: 12%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 7%" />
<col style="width: 9%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="11"><p>Zimbabwe</p>
<p>Corn</p>
<p>(1000 HA)(1000 MT)(MT/HA)</p></td>
</tr>
<tr class="even">
<td></td>
<td>2004</td>
<td>Revised</td>
<td></td>
<td>2005</td>
<td>Estimate</td>
<td></td>
<td>2006</td>
<td>Forecast</td>
<td></td>
<td>UOM</td>
</tr>
<tr class="odd">
<td></td>
<td><p>USDA</p>
<p>Official</p></td>
<td><p>Post</p>
<p>Estimate</p></td>
<td><p>Post</p>
<p>Estimate</p>
<p>New</p></td>
<td><p>USDA</p>
<p>Official</p></td>
<td><p>Post</p>
<p>Estimate</p></td>
<td><p>Post</p>
<p>Estimate</p>
<p>New</p></td>
<td><p>USDA</p>
<p>Official</p></td>
<td><p>Post</p>
<p>Estimate</p></td>
<td colspan="2"><p>Post</p>
<p>Estimate</p>
<p>New</p></td>
</tr>
<tr class="even">
<td>Market Year Begin</td>
<td></td>
<td>05/2005</td>
<td>05/2005</td>
<td></td>
<td>05/2006</td>
<td>05/2006</td>
<td></td>
<td>05/2007</td>
<td>05/2007</td>
<td>MM/YYYY</td>
</tr>
<tr class="odd">
<td>Area Harvested</td>
<td>1200</td>
<td>1200</td>
<td>1200</td>
<td>1300</td>
<td>1400</td>
<td>1300</td>
<td>1400</td>
<td>1450</td>
<td>1200</td>
<td>(1000 HA)</td>
</tr>
<tr class="even">
<td>Beginning Stocks</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>25</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>Production</td>
<td>550</td>
<td>550</td>
<td>550</td>
<td>900</td>
<td>1000</td>
<td>900</td>
<td>1000</td>
<td>1100</td>
<td>600</td>
<td>(1000 MT)</td>
</tr>
<tr class="even">
<td>MY Imports</td>
<td>1033</td>
<td>1040</td>
<td>1002</td>
<td>500</td>
<td>500</td>
<td>200</td>
<td>500</td>
<td>500</td>
<td>450</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>TY Imports</td>
<td>731</td>
<td>550</td>
<td>731</td>
<td>900</td>
<td>900</td>
<td>900</td>
<td>600</td>
<td>600</td>
<td>350</td>
<td>(1000 MT)</td>
</tr>
<tr class="even">
<td>TY Imp. from U.S.</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>Total Supply</td>
<td>1583</td>
<td>1590</td>
<td>1552</td>
<td>1400</td>
<td>1525</td>
<td>1100</td>
<td>1500</td>
<td>1600</td>
<td>1050</td>
<td>(1000 MT)</td>
</tr>
<tr class="even">
<td>MY Exports</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>TY Exports</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>(1000 MT)</td>
</tr>
<tr class="even">
<td>Feed Consumption</td>
<td>75</td>
<td>75</td>
<td>75</td>
<td>75</td>
<td>125</td>
<td>75</td>
<td>75</td>
<td>75</td>
<td>50</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>FSI Consumption</td>
<td>1508</td>
<td>1490</td>
<td>1477</td>
<td>1325</td>
<td>1400</td>
<td>1025</td>
<td>1425</td>
<td>1475</td>
<td>1000</td>
<td>(1000 MT)</td>
</tr>
<tr class="even">
<td>Total Consumption</td>
<td>1583</td>
<td>1565</td>
<td>1552</td>
<td>1400</td>
<td>1525</td>
<td>1100</td>
<td>1500</td>
<td>1550</td>
<td>1050</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>Ending Stocks</td>
<td>0</td>
<td>25</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>50</td>
<td>0</td>
<td>(1000 MT)</td>
</tr>
<tr class="even">
<td>Total Distribution</td>
<td>1583</td>
<td>1590</td>
<td>1552</td>
<td>1400</td>
<td>1525</td>
<td>1100</td>
<td>1500</td>
<td>1600</td>
<td>1050</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>Yield</td>
<td>0.458333</td>
<td>0.458333</td>
<td>0.458333</td>
<td>0.692308</td>
<td>0.714286</td>
<td>0.692308</td>
<td>0.714286</td>
<td>0.758621</td>
<td>0.5</td>
<td>(MT/HA)</td>
</tr>
</tbody>
</table>

## Production

Zimbabwe's rainfall season has ended. The bulk of the corn crops are now
mature and harvesting is in progress and in some cases is complete.
Generally, the corn crop performed poorly due to a combination of the El
Nino induced drought and a shortage of critical inputs. The national
corn harvest is projected to be around 600,000MT, about 43% of national
requirements.

Only the northern areas received fairly good rains although the shortage
of critical inputs such as fertilizer negatively affected yields. The
areas to the south of Harare experienced widespread crop failure due to
the prolonged drought, particularly in the second half of the season.

The joint World Food Program (WFP)/ Food and Agriculture Organization
(FAO) field crop assessments as part of the crop and food security
assessment mission (CFSAM) were completed around Mid-May. It is hoped
that the final report will be available in early June.

## Consumption

Human and feed requirements are estimated at about 1.4 million MT of
corn annually but this is unlikely to be reached in MY 2007/08 due to a
number of factors such as emigration and the hyperinflation prevailing
in the country. The emigration of people to neighboring countries
particularly South Africa will reduce domestic demand. Unofficial
estimates are that up to 25% of Zimbabwe's population has emigrated
(mainly to neighboring countries) in search of better living conditions.
Inflation will also affect consumption in MY2007/8. The annual inflation
rate for April increased 1,513.7%, the highest margin so far, to
3,713.4%. This high rate of inflation will severely restrict consumer
purchasing power. Coupled with that, corn prices are likely to remain
high in most parts of the country after the poor harvests, further
limiting ability to purchase corn.

##### 

## Trade

The corn deficit for MY2006/7 was about 500,000MT and the government had
intended to import 480,000MT from South Africa. However, imports from
South Africa from 1 May 2006 up to 31 April 2007 only reached 111,691MT.

The following table contains monthly shipments of corn from South Africa
to Zimbabwe in MY2006/7.

Monthly imports of corn from South Africa in MY2006/7

+-----------------+-----------------+-----------------+-----------------+
| **Zimbabwe's    |                 |                 |                 |
| Corn imports    |                 |                 |                 |
| from South      |                 |                 |                 |
| Africa**        |                 |                 |                 |
|                 |                 |                 |                 |
| **MY2006/7**    |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| **Year and      | **White corn    | **Yellow corn   | **Total (MT)**  |
| Month**         | (MT)**          | (MT)**          |                 |
+-----------------+-----------------+-----------------+-----------------+
| **2006**        |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| May             | 36,879          | 264             | 37,143          |
+-----------------+-----------------+-----------------+-----------------+
| June            | 24,022          | Nil             | 24,022          |
+-----------------+-----------------+-----------------+-----------------+
| July            | 27,293          | Nil             | 27,293          |
+-----------------+-----------------+-----------------+-----------------+
| August          | 100             | Nil             | 100             |
+-----------------+-----------------+-----------------+-----------------+
| September       | 304             | Nil             | 304             |
+-----------------+-----------------+-----------------+-----------------+
| October         | 8,072           | Nil             | 8,072           |
+-----------------+-----------------+-----------------+-----------------+
| November        | 5,371           | Nil             | 5,371           |
+-----------------+-----------------+-----------------+-----------------+
| December        | 1,726           | Nil             | 1,726           |
+-----------------+-----------------+-----------------+-----------------+
| **2007**        |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| January         | 1,772           | Nil             | 1,772           |
+-----------------+-----------------+-----------------+-----------------+
| February        | Nil             | Nil             | Nil             |
+-----------------+-----------------+-----------------+-----------------+
| March           | 4,319           | Nil             | 4,319           |
+-----------------+-----------------+-----------------+-----------------+
| April           | 1,569           | Nil             | 1,569           |
+-----------------+-----------------+-----------------+-----------------+
| **Total**       | **111,427**     | **264**         | **111,691**     |
+-----------------+-----------------+-----------------+-----------------+

The corn deficit for MY 2007/8 will be about 800,000MT and the
government is expected to cover this gap through imports. Zimbabwe's
ability to import enough corn to cover the food deficit will be
seriously constrained by the critical shortage of foreign currency
facing the country.

Due to the high corn prices in South Africa, Zimbabwe has shifted its
focus on corn imports to Zambia and Malawi. Both Zambia and Malawi have
the capability to supply Zimbabwe with white corn that is GMO free, the
two key requirements that Zimbabwe demands. Malawi has surplus corn of
about 1.1 million MT from two good years of corn production. Zambia's
surplus is yet to be determined.

Zambia corn price at US\$250/MT is higher than Malawi's price of
US\$198/MT. Zimbabwe has announced plans to import about 400,000MT of
corn from Malawi. With the critical shortage of foreign currency facing
the country, it had been reported that the Zimbabwean government would
barter sugar for corn from Malawi. However, verification of this report
revealed that this barter-trade plan has not and is unlikely to come
into effect as Malawi is a net exporter of sugar. Zimbabwe will have to
pay for the Malawian corn with scarce foreign currency.

# WHEAT

<table>
<colgroup>
<col style="width: 14%" />
<col style="width: 8%" />
<col style="width: 12%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 7%" />
<col style="width: 8%" />
<col style="width: 6%" />
<col style="width: 7%" />
<col style="width: 8%" />
<col style="width: 9%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="11"><p><strong>Zimbabwe</strong></p>
<p><strong>Wheat</strong></p>
<p>(1000 HA)(1000 MT)(MT/HA)</p></td>
</tr>
<tr class="even">
<td></td>
<td>2005</td>
<td>Revised</td>
<td></td>
<td>2006</td>
<td>Estimate</td>
<td></td>
<td>2007</td>
<td>Forecast</td>
<td></td>
<td>UOM</td>
</tr>
<tr class="odd">
<td></td>
<td><p>USDA</p>
<p>Official</p></td>
<td><p>Post</p>
<p>Estimate</p></td>
<td><p>Post</p>
<p>Estimate</p>
<p>New</p></td>
<td><p>USDA</p>
<p>Official</p></td>
<td><p>Post</p>
<p>Estimate</p></td>
<td><p>Post</p>
<p>Estimate</p>
<p>New</p></td>
<td><p>USDA</p>
<p>Official</p></td>
<td><p>Post</p>
<p>Estimate</p></td>
<td colspan="2"><p>Post</p>
<p>Estimate</p>
<p>New</p></td>
</tr>
<tr class="even">
<td><strong>Market Year Begin</strong></td>
<td></td>
<td>07/2005</td>
<td>07/2005</td>
<td></td>
<td>07/2006</td>
<td>07/2006</td>
<td></td>
<td>07/2007</td>
<td>07/2007</td>
<td>MM/YYYY</td>
</tr>
<tr class="odd">
<td>Area Harvested</td>
<td>35</td>
<td>35</td>
<td>35</td>
<td>35</td>
<td>45</td>
<td>35</td>
<td>0</td>
<td>0</td>
<td>35</td>
<td>(1000 HA)</td>
</tr>
<tr class="even">
<td>Beginning Stocks</td>
<td>100</td>
<td>0</td>
<td>100</td>
<td>100</td>
<td>0</td>
<td>100</td>
<td>100</td>
<td>0</td>
<td>100</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>Production</td>
<td>120</td>
<td>120</td>
<td>120</td>
<td>135</td>
<td>135</td>
<td>135</td>
<td>0</td>
<td>0</td>
<td>140</td>
<td>(1000 MT)</td>
</tr>
<tr class="even">
<td>MY Imports</td>
<td>125</td>
<td>90</td>
<td>125</td>
<td>125</td>
<td>100</td>
<td>125</td>
<td>0</td>
<td>0</td>
<td>125</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>TY Imports</td>
<td>125</td>
<td>90</td>
<td>125</td>
<td>125</td>
<td>80</td>
<td>125</td>
<td>0</td>
<td>0</td>
<td>125</td>
<td>(1000 MT)</td>
</tr>
<tr class="even">
<td>TY Imp. from U.S.</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>Total Supply</td>
<td>345</td>
<td>210</td>
<td>345</td>
<td>360</td>
<td>235</td>
<td>360</td>
<td>100</td>
<td>0</td>
<td>365</td>
<td>(1000 MT)</td>
</tr>
<tr class="even">
<td>MY Exports</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>TY Exports</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>(1000 MT)</td>
</tr>
<tr class="even">
<td>Feed Consumption</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>FSI Consumption</td>
<td>245</td>
<td>210</td>
<td>245</td>
<td>260</td>
<td>235</td>
<td>260</td>
<td>0</td>
<td>0</td>
<td>265</td>
<td>(1000 MT)</td>
</tr>
<tr class="even">
<td>Total Consumption</td>
<td>245</td>
<td>210</td>
<td>245</td>
<td>260</td>
<td>235</td>
<td>260</td>
<td>0</td>
<td>0</td>
<td>265</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>Ending Stocks</td>
<td>100</td>
<td>0</td>
<td>100</td>
<td>100</td>
<td>0</td>
<td>100</td>
<td>0</td>
<td>0</td>
<td>100</td>
<td>(1000 MT)</td>
</tr>
<tr class="even">
<td>Total Distribution</td>
<td>345</td>
<td>210</td>
<td>345</td>
<td>360</td>
<td>235</td>
<td>360</td>
<td>0</td>
<td>0</td>
<td>365</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>Yield</td>
<td>3.428571</td>
<td>3.428571</td>
<td>3.428571</td>
<td>3.857143</td>
<td>3</td>
<td>3.857143</td>
<td>0</td>
<td>0</td>
<td>4.000000</td>
<td>(MT/HA)</td>
</tr>
</tbody>
</table>

## Production

Currently, winter wheat planting is in progress. This year the country
has enough wheat seed stocks for a crop size of 75,000 hectares. AREX
estimates that by 25 May 18,000 hectares of wheat had been planted ahead
of the planting cut-off date at the end of May. The recommended planting
dates for the winter wheat varieties are from 1^st^ to May 31. Planting
after the end of May lowers yields by an estimated 10 to 15% for every
week's delay. Adherence to the recommended planting dates and agronomic
practices will ensure that optimum yield potential is attained.

Government had set an ambitious target of 76,000 hectares of winter
wheat but by 25 May only 18,000 hectares had been planted. It is likely
that the total area under winter wheat in 2007 will not exceed 35,000
hectares. Failure to achieve the target wheat area is due to a number of
problems.

Major constraints to wheat production include inadequate fuel supplies
and tillage capacity, late planting, absence of a producer price for the
commodity, high production cost, controlled market for the commodity and
inability by the GMB to effect timely payments to farmers. Currently
maize and wheat are controlled commodities that must only be sold to the
GMB. The wheat producer price has still to be announced.

The acute shortage of fuel and tractors negatively affected tillage
activities, resulting in much less area prepared for planting. There is
a critical shortage of tillage machinery particularly tractors, to
support the newly resettled A1 and A2 farmers, most of whom do not own
farm machinery but rely on hiring tillage services. A large percentage
of the national tractor fleet, combine harvesters and other implements
cannot be rehabilitated after breaking down owing to a shortage of spare
parts. Imported spares availability remains a problem because of foreign
exchange shortages. In an effort to address the problem of tillage
capacity the government through a loan from China imported 400 tractors
this year that are yet to be distributed. Tobacco farmers, some of whom
rotate tobacco with winter wheat were chosen as the main beneficiaries
of the machinery as they have the capacity to contribute towards the
generation of foreign currency for repayment of the loan from China.

The limited availability of fuel further compounded tillage activities
as only 40% of the fuel required for tillage was made available to wheat
farmers. Also, there is a shortage of ammonium nitrate fertilizer, with
the deficit estimated at 15,000MT.

In order to ensure that irrigation schedules for the wheat crop are not
hindered by erratic power supplies as was the case in previous seasons,
The Zimbabwe Electricity Supply Authority (ZESA), the power utility
firm, is endeavoring to supply consistent and reliable power supplies to
the wheat farming areas. Urban households are bearing the brunt of
frequent power outages as priority in power allocation is given to the
farms.

With the tillage constraints being experienced, it is unlikely that the
total area under wheat will exceed 35,000 hectares. Our estimate is for
a wheat area planted of between 30,000 and 35,000 hectares and
production of between 120,000MT and 140,000MT

## Consumption

Zimbabwe consumes about 350,000MT of wheat annually. The country
produced 135,000MT in 2006 and the deficit of 215,000MT has to be
imported to meet domestic needs. However, consumption in 2007 may be
limited by supply constraints. The Grain Marketing Board (GMB) is
currently allocating 5,000MT wheat per week to millers (or 260,000MT per
annum) because of limited wheat availability. In addition, the
prevailing hyperinflationary environment is seriously eroding purchasing
power and consumption in MY2007/8 will be lower than 350,000MT.

## Trade

Wheat imports have been very slow. For the national requirements to be
met, the country has to import a total of 215,000MT to augment local
production. The GMB wheat import figure for 2006/7 is 66,720MT