Required Report - public distribution

**Date:** 7/15/2004

**GAIN Report Number:** RH4005

RH4005

**Zimbabwe**

**Grain and Feed**

**Annual**

**2004**

**Approved by:**

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

U.S. Embassy, South Africa

**Prepared by:**

Herman Germishuis

**Report Highlights:**

While Zimbabwe still suffers economic and political turmoil, indications
are that corn production recovered somewhat in 2003/2004. The crop
planted in 2003 is estimated at 900,000 tons, showing an improvement
over the previous two seasons. It is still well short of estimated
domestic demand of 1.6 million tons. The Government of Zimbabwe is
expected to import about 500,000 tons, leaving 200,000 tons to be
supplied through food aid. The current wheat crop is estimated at 80,000
tons with the 275,000 tons deficit to be made up for by commercial
imports.

Includes PSD Changes: Yes

Includes Trade Matrix: No

Annual Report

Pretoria \[SF1\]

\[RH\]

**Summary**

Zimbabwe suffers from a precarious economic and political slump. The
availability and affordability of food has become a focal point in the
turmoil, with the infamous land redistribution program mainly blamed for
the problems. Corn is the staple food crop and while the crop planted in
1999 still exceeded 2.1 million tons, the current crop, planted in 2003,
is estimated at 900,000 tons. Various national and international
agencies are involved in trying to estimate the food supply and demand
situation, with varying results. The data used in this report is an
educated aggregate of the different figures. The situation is
complicated by the fact that the agricultural economy has reverted to
subsistence/small scale farmer production with very little real data,
such as deliveries to silos, to work with.

While the current, 900,000 ton, corn crop estimate indicates an
improvement over the past two seasons, it is still well short of
estimated domestic demand of 1.6 million tons. The Government of
Zimbabwe has shown remarkable resilience in purchasing corn and 2003/04
purchases probably exceeded 350,000 tons, with an additional 80,000 tons
brought in by the private sector. Food aid shipments added about 320,000
tons for a grand total of 750,000 tons. The MY 2004/05 deficit is about
700,000 tons with the Government expected to cover about 500,000 tons
with commercial imports and the rest to be supplied as food aid.

The 2004 wheat crop is only expected to reach 80,000 tons with the
275,000-ton deficit to be made up by commercial imports.

**Sources**

<http://www.fao.org/docrep/007/J2650e/J2650e00.htm>

<http://www.fao.org/docrep/007/J2649e/J2649e06.htm>

<http://www.fao.org/docrep/007/J2649e/J2649e10.htm>

<http://www.fao.org/docrep/007/J2649e/J2649e08.htm>

<http://www.fao.org/docrep/006/J1119e/J1119e10.htm>

<http://www.fao.org/docrep/006/J1119e/J1119e59.htm>

[www.fao/GIEWS](http://www.fao/GIEWS)

[www.fews.net](http://www.fews.net/)

[www.wfp.org](http://www.wfp.org/)

[www.sagis.org.za](http://www.sagis.org.za/)

[www.ZIMVAC.org.zw](http://www.ZIMVAC.org.zw/)

[www.sarpn.org.za](http://www.sarpn.org.za/) Famine in Zimbabwe

[www.fao.org/WAICENT](http://www.fao.org/WAICENT) Food Security

[www.irrinews.org](http://www.irrinews.org/)

[www.reliefweb.int./w/rwb.nsf](http://www.reliefweb.int./w/rwb.nsf)

<http://www.fas.usda.gov/pecad/highlights/2004/06/zimbabwe/index.htm>

[http://zimbabwesituation.com](http://zimbabwesituation.com/)

**CORN**

  ------------------- -------------- --------- --------- ---------- --------- ----------
  **PSD Table**                                                               

  **Country**         **Zimbabwe**                                            

  **Commodity**       **Corn**                                                

                      2002           Revised   2003      Estimate   2004      Forecast

                      USDA \[Old\]   Post      USDA      Post       USDA      Post
                                     \[New\]   \[Old\]   \[New\]    \[Old\]   \[New\]

  **Market Year                      05/2003             05/2004              05/2005
  Begin**                                                                     

  Area Harvested      1400           1355      1300      1365       1400      1395

  Beginning Stocks    81             90        81        130        81        130

  Production          800            800       900       900        1000      1150

  TOTAL Mkt. Yr.      400            750       600       700        600       450
  Imports                                                                     

  Oct-Sep Imports     625            0         600       0          600       0

  Oct-Sep Import U.S. 0              0         0         0          0         0

  TOTAL SUPPLY        1281           1640      1581      1730       1681      1730

  TOTAL Mkt. Yr.      0              0         0         0          0         0
  Exports                                                                     

  Oct-Sep Exports     0              0         0         0          0         0

  Feed Dom.           100            100       150       125        150       125
  Consumption                                                                 

  TOTAL Dom.          1200           1510      1500      1600       1600      1650
  Consumption                                                                 

  Ending Stocks       81             130       81        130        81        80

  TOTAL DISTRIBUTION  1281           1640      1581      1730       1681      1730
  ------------------- -------------- --------- --------- ---------- --------- ----------

**Production**

At the moment it is virtually impossible to make a meaningful analysis
of the food supply in Zimbabwe. The whole situation has become highly
politicized and data regarding corn, the staple food, is limited. The
government is adamant to prove the success of its much maligned land
reform program and predicts a record harvest of 2.4 million tons from
the area planted in 2003, three times the quantity produced in the
previous season. In this self-sufficiency charade it is also not
releasing meaningful trade figures, aggravating the uncertainty. Various
international and local agencies are involved in trying to solve the
puzzle. The 2004 FAO assessment mission was cut short by the government
before it could finish its task. It did, however, conclude that the
current corn crop is only likely to reach about 708,000 tons. Although
these are widely divergent figures, we are also taking data from other
sources into account. Findings are based on fieldwork, rainfall and
other weather data, satellite imagery, etc. The problem is that the
estimates concerning the area planted vary considerably in this new,
small farmer, based economy. While the additional information used in
conjunction with historical trends can give an indication of the
expected average yield, estimating the total crop is based not only on
the area planted, but also on the area harvested for grain. In the final
analysis we used all the data from the various sources, discarding
obvious outliers, and arrived at our estimate.

Corn production from the crop planted in 2003 is estimated at 900,000
tons, up 100,000 tons from the previous season's 800,000 tons. Harvested
area is estimated at 1.365 million hectares, up 10,000 hectares from
last season. The less than expected increase in area planted is
attributed to seed and other input shortages at the time of planting and
a severe dry spell during November and December 2003, which destroyed
many first plantings. The production trend is up, and we predict that
the crop to be planted later in 2004 will show further improvement.

The land resettlement program has reduced the harvested area for the
large-scale commercial sector from an estimated 162,000 hectares in
1999/2000 to 5,000 hectares this season. Correspondingly, corn
production in the high yielding commercial sector dropped from about 40%
of total output in 1999/2000 to an estimated three percent this year.
This had a devastating effect on the average yield attained but will be
the norm for the future as the country reverts to smaller scale
production.

The following table highlights the situation using the revised area and
production data:

+---------+---------+---------+---------+---------+---------+---------+
| Year of | 1999    | 2000    | 2001    | 2002    | 2003    | 2004    |
| p       |         |         |         |         |         |         |
| lanting |         |         |         |         |         |         |
+---------+---------+---------+---------+---------+---------+---------+
| Area    | 1,425   | 1,225   | 1,320   | 1,355   | 1,365   | 1,395   |
|         |         |         |         |         |         |         |
| 1,000   |         |         |         |         |         |         |
| ha      |         |         |         |         |         |         |
+---------+---------+---------+---------+---------+---------+---------+
| Yield   | 1.51    | 1.20    | 0.38    | 0.59    | 0.66    | 0.82    |
|         |         |         |         |         |         |         |
| Mt./ha. |         |         |         |         |         |         |
+---------+---------+---------+---------+---------+---------+---------+
| Pro     | 2,150   | 1,475   | 500     | 800     | 900     | 1,150   |
| duction |         |         |         |         |         |         |
|         |         |         |         |         |         |         |
| 1,000   |         |         |         |         |         |         |
| mt.     |         |         |         |         |         |         |
+---------+---------+---------+---------+---------+---------+---------+

National corn yield for the current season is estimated at 0.7
tons/hectare, below the five-year average of 0.9 tons/hectare. This is
due to below average rainfall in the eastern grain areas and the
reduction in the area planted on the high yielding commercial farms.
Additional factors which affected corn yields this year include the cost
and availability of inputs, the quality of seeds available, and a
shortage of equipment. The newly resettled farmers also had to adjust to
their new environment. The reasons for the smaller than expected crop
are well documented in the various reports listed under Sources on page
2.

# Consumption

Consumption demand during MY 2004/05 is estimated at 1.6 million tons,
including 1.375 million ton for human consumption, 125,000 tons for feed
and 100,000 tons for seed and losses. It must be clear that the bulk of
the crop is small-scale production and subsistence consumption, which
never reaches the silos (deliveries may reach 250,000 tons). Actual
figures can thus not be measured and it remains a subjective
calculation. Consumption in My 2001/01 was close to 1.9 million tons but
dropped to 1.7 in 2001/02 and about 1.35 in 2002/03 when the combined
effect of a drought and the land reform affected supply. Consumption
recovered to about 1.51 million tons in My 2003/04 assisted by food aid
shipments.

# Trade

Although official figures are not available, Zimbabwe imported
substantial quantities of corn during MY2003/04. The Grain Marketing
Board apparently imported more than 350,000 tons, the WFP about 220,000
tons, other NGO's about 100,000 tons, and private imports amounted to at
least 80,000 tons for a total of 750,000 tons. This included more than
410,000 tons from or via South Africa (including some donations). The
following table gives an indication of food aid deliveries:

  ----------------- ----------------- ----------------- -----------------
  Donor             2002/03           Metric tons       2003/04

  European Union    3,300             European Union    23,100

  NGO's             10,600            India             50,000

  USA               10,300            USA               27,800

  World Food        267,600           WFP               221,200
  Program                                               

  Total             291,800           Total             322,100
  ----------------- ----------------- ----------------- -----------------

The EU bought 23,100 tons, and the WFP 108,700 tons, for a total of
131,800 tons, in South Africa, mainly due to the fact that Zimbabwe
insisted on GMO free corn. During MY 2003/04, South Africa also received
the 27,000 tons of GMO free white corn from the US for re-export to
Zimbabwe. During the first two months of the new season, May and June
2004, South Africa sent 40,500 tons of white corn to Zimbabwe. Donated
GMO grain for Zimbabwe coming through South Africa has to be milled
before delivery, in which case it is not included in the "whole grain"
trade figures.

The 2004/05 deficit is estimated at about 700,000 tons. Apparently the
GMB bought an additional 200,000+ tons of corn to be delivered during
the current, 2004/05, marketing year. The new monetary policy of strict
regulation of foreign exchange transactions introduced earlier this year
through a mechanism of controlled auctions, increased cotton production,
and higher tobacco prices, has improved the Government's foreign
exchange position. The government apparently also sold a big portion of
the tobacco crop forward, obtaining foreign exchange in the process.

If Zimbabwe is able to import another 300,000 tons of corn commercially,
on top of the 200,000 tons already bought, the deficit will decrease.
With total import needs calculated at 700,000 tons, this leaves a
deficit of 200,000 tons to be covered by food aid donations. The aid
agencies apparently had 60,000 tons available in country, but this was
included in the beginning stocks of the PS&D. Restrictions on private
sector corn imports were eased in 2003 and this should enable the
private sector to further contribute to food imports. Given relatively
good corn production in Zambia and Mozambique this year, substantial
cross-border inflows are likely to occur, helping reduce the uncovered
deficit. The big question remains - can Zimbabwe's pay for another
300,000 tons?

Zambia, Zimbabwe's northern neighbor, has become a net food exporter
after years of relying on food aid. Over the past nine months the
country has exported more than 100,000 tons of white corn to Zimbabwe,
Angola and the Democratic Republic of the Congo, and donated corn to
Tanzania. There are reports of more sales to Zimbabwe. Zambia's white
corn production has increased from 600,000 tons harvested in 2002 to 1.2
million tons in 2003 and 1.4 million tons in 2004. The increase is due
to better weather and the efforts of ex-Zimbabwean farmers settled in
Zambia. Handling, storage and distribution are also now being managed by
an affiliate of the South African AFGRI grain company, which also
supplies inputs.

# Stocks

Apparently the Grain Marketing Board had 60,000 tons in stock at the
beginning of May 2004, private stocks amounted to about 10,000 tons, and
aid agency stocks of about 60,000 tons to total 130,000 tons. This
amounted to about one month's consumption needs. There are rumors that
the Government is holding much larger stocks to be used to influence
voters during the coming election, but this can't be substantiated.
Foreign exchange shortages still limit the amount of stock that can be
held.

# Wheat

  ------------------- -------------- --------- --------- ---------- --------- ----------
  **PSD Table**                                                               

  **Country**         **Zimbabwe**                                            

  **Commodity**       **Wheat**                                               

  1000 Hectare        2002           Revised   2003      Estimate   2004      Forecast

  1000 Metric tons    USDA \[Old\]   Post      USDA      Post       USDA      Post
                                     \[New\]   \[Old\]   \[New\]    \[Old\]   \[New\]

  **Market Year                      07/2002             07/2003              07/2004
  Begin**                                                                     

  Area Harvested      40             38        30        30         35        20

  Beginning Stocks    100            10        100       0          100       30

  Production          150            160       90        90         150       80

  TOTAL Mkt. Yr.      100            110       150       255        100       275
  Imports                                                                     

  Jul-Jun Imports     100            0         150       0          100       0

  Jul-Jun Import U.S. 17             0         0         0          0         0

  TOTAL SUPPLY        350            320       340       345        350       385

  TOTAL Mkt. Yr.      0              0         0         0          0         0
  Exports                                                                     

  Jul-Jun Exports     0              0         0         0          0         0

  Feed Dom.           0              0         0         0          0         0
  Consumption                                                                 

  TOTAL Dom.          250            280       240       315        250       355
  Consumption                                                                 

  Ending Stocks       100            0         100       30         100       30

  TOTAL DISTRIBUTION  350            320       340       345        350       385
  ------------------- -------------- --------- --------- ---------- --------- ----------

**Production**

Zimbabwe has two crop seasons for grains, summer and winter. The main
growing season is summer and corresponds to the rainy season that
usually starts in October-November and ends in April-May.  The principal
summer grains are corn, sorghum, and millet, but rain fed wheat may also
be grown.  The main winter crops, wheat and barley, are planted in
April-May and harvested in September, and are typically irrigated on
large-scale commercial farms.

Wheat production this year is expected to be below the five-year average
largely because the land redistribution program has greatly affected the
irrigation capacity of the farms, which previously produced 95 percent
of the wheat crop. We estimated the area planted to wheat in 2003 at
30,000 hectares, and the current 2004 area planted at 20,000 hectares. 

The following table highlights the recent history of wheat production in
Zimbabwe:

  ----------------- ----------------- ----------------- -----------------
  Year of planting  Area, 1,000 ha.   Yield, Mt./ha.    Production 1,000
                                                        mt.

  1999              58                5.6               322

  2000              46                5.4               250

  2001              45                7.1               323

  2002              37.5              4.3               161

  2003              30                3.0               90

  2004              20                4.0               80
  ----------------- ----------------- ----------------- -----------------

As most wheat in Zimbabwe is grown during winter under irrigation it is
classified as "spring" wheat in international terms. Under normal
conditions some hard wheat is imported to improve the gristing
qualities. There is currently a shortage of wheat in the market but
supplies are being supplemented by imports until the new crop is ready
by mid-October.

Between July 2003 and the end of June 2004, Zimbabwe imported 70,000
tons of wheat from South Africa. In 2002/03 130,000 tons and 2003/04 to
date 120,000 tons of imported wheat were re-exported from South Africa
to African states, the bulk going to Zimbabwe. As total Zimbabwean
imports for the 2003/04 season is estimated at 255,000 tons, substantial
quantities were shipped through other regional ports.

Import needs for 2004/05 are estimated at about 275,000 tons, which
Zimbabwe should be able to purchase in the commercial market.