Voluntary Report - public distribution

Date: 3/31/2006

GAIN Report Number: RH6003

RH6003

Zimbabwe

Grain and Feed

Monthly Update

2006

Approved by:

![](media/image1.wmf)Rachel Bickford

#### **U.S. Embassy, South Africa**

Prepared by:

Herman Germishuis

Report Highlights:

After a favorable rainfall season Zimbabwe is expected to harvest
900,000 tons of corn from the crop planted in 2005 compared to the
550,000 tons harvested form the crop planted in 2004. Imports, to
alleviate the food deficit, continue unabated and from May 2005 to March
24, 2006 imports from South Africa amounted to 958,000 tons. After the
harvest in May import demand should slow down but will pick up again
later and should reach about 600,000 tons over the full season.

Includes PSD Changes: Yes

Includes Trade Matrix: No

Unscheduled Report

Pretoria \[SF1\]

\[RH\]

## **SUMMARY** {#summary-1}

Most parts of Zimbabwe have received normal to above normal rainfall so
far this season. The southeastern part of the country has suffered a
mid-season drought that has severely reduced yield potential in the
affected areas. With corn production estimated at between 800,000 and
900,000MT the country faces another food deficit after the harvest in
May 2006.

The area to be planted to wheat in 2006 is estimated at 35,000 hectares.

###### CORN

  ------------------- ---------- --------- --------- ---------- --------- ----------
  PSD Table                                                               

  Country             Zimbabwe                                            

  Commodity           Corn                                                

  1000 HA             2003       Revised   2004      Estimate   2005      Forecast

  1000 MT             USDA       Post      USDA      Post       USDA      Post New\]
                      \[Old\]    \[New\]   \[Old\]   \[New\]    \[Old\]   

  Market Year Begin              05/2004             05/2005              05/2006

  Area Harvested      1365       1365      1200      1200       1300      1300

  Beginning Stocks    46         130       33        0          133       0

  Production          900        900       550       550        900       900

  TOTAL Mkt. Yr.      287        300       800       1050       300       600
  Imports                                                                 

  Oct-Sep Imports     233        233       700       550        400       900

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

  TOTAL SUPPLY        1233       1330      1383      1600       1333      1500

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

  Oct-Sep Exports     0          0         0         0          0         0

  Feed Dom.           25         125       25        75         25        75
  Consumption                                                             

  TOTAL Dom.          1200       1330      1250      1600       1250      1500
  Consumption                                                             

  Ending Stocks       33         0         133       0          83        0

  TOTAL DISTRIBUTION  1233       1330      1383      1600       1333      1500
  ------------------- ---------- --------- --------- ---------- --------- ----------

###### Production

The corn crop that was planted early, (November and December, 2005), is
nearing maturity or in the case of short season varieties has already
matured but still has to dry.

Rainfall in most parts of the country has been normal to above normal
with the exception of the southeastern and southern parts of the country
(Manicaland, Masvingo and Matebeleland South provinces) that experienced
a long dry spell in February and March, reducing prospects of good
harvests in these areas. Most of the late-planted crops in the drought
stricken areas have reached permanent wilting point and will not
recover. These provinces also experienced the driest spell last season.

Shortage of inputs (seed, fertilizer and chemicals), shortage of labor
for weeding particularly on the smaller commercial farms, leaching of
nutrients and a controlled price and market for the commodity, all
conspired to lower production this season. Insecurity of land tenure is
a major constraint to long-term developments and investments on the
farms. The government is yet to give security of tenure to beneficiaries
of the land reform program.

Government has not yet released official crop estimates. AREX is to
carry out crop surveys early next month. Our estimate is for a national
corn output of between 800,000 and 900,000MT, which is much, lower than
the theoretical national requirement of about 1,8 million MT.

## **Consumption**

Corn availability was erratic throughout the country. Consequently, corn
flour was only occasionally available in urban and rural retail outlets.

**Trade**

Despite a serious shortage of foreign currency, imports of corn from
South Africa continued as shown on the table below.

Monthly imports of corn (May 2005 to March 2006)

+----------------------------------+-----------------------------------+
| Month and Year                   | ###                               |
|                                  |  Corn imported from South Africa  |
+----------------------------------+-----------------------------------+
| 2005                             | MT                                |
+----------------------------------+-----------------------------------+
| May                              | 107,205                           |
+----------------------------------+-----------------------------------+
| June                             | 95,166                            |
+----------------------------------+-----------------------------------+
| July                             | 95,274                            |
+----------------------------------+-----------------------------------+
| August                           | 87,327                            |
+----------------------------------+-----------------------------------+
| September                        | 87,553                            |
+----------------------------------+-----------------------------------+
| October                          | 77,650                            |
+----------------------------------+-----------------------------------+
| November                         | 87,134                            |
+----------------------------------+-----------------------------------+
| December                         | 92,431                            |
+----------------------------------+-----------------------------------+
| 2006                             |                                   |
+----------------------------------+-----------------------------------+
| January                          | 51,044                            |
+----------------------------------+-----------------------------------+
| ### February                     | 110,196                           |
+----------------------------------+-----------------------------------+
| ### March (up to 03/24           | 67,300                            |
+----------------------------------+-----------------------------------+
| ### Total (May 1 to March 24)    | 958,280                           |
+----------------------------------+-----------------------------------+
| ### Average monthly imports      | 89,100                            |
+----------------------------------+-----------------------------------+

Government has reported spending US\$135 million to finance corn imports
from South Africa in the period May to December 2005.

At the current average rate of importation of 89,100 MT per month, a
total of 1.05 million MT would have been imported from South Africa by
the end of April, leaving a gap of 150,000 MT from the government's
stated target of 1.2 million MT for the season.

###### WHEAT

  ------------------- ---------- --------- --------- ---------- --------- ----------
  PSD Table                                                               

  Country             Zimbabwe                                            

  Commodity           Wheat                                               

  1000 HA             2003       Revised   2004      Estimate   2005      Forecast

  1000 MT             USDA       Post      USDA      Post       USDA      Post
                      \[Old\]    \[New\]   \[Old\]   \[New\]    \[Old\]   \[New\]

  Market Year Begin              07/2003             07/2004              07/2005

  Area Harvested      30         30        35        35         46        35

  Beginning Stocks    100        0         100       0          100       0

  Production          90         90        140       105        140       120

  TOTAL Mkt. Yr.      170        170       130       130        150       90
  Imports                                                                 

  Jul-Jun Imports     170        170       130       130        150       90

  Jul-Jun Import U.S. 6          6         0         21         0         0

  TOTAL SUPPLY        360        260       370       235        390       210

  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.          260        260       270       235        290       210
  Consumption                                                             

  Ending Stocks       100        0         100       0          100       0

  TOTAL DISTRIBUTION  360        260       370       235        390       210
  ------------------- ---------- --------- --------- ---------- --------- ----------

**Production**

The estimated wheat output for 2005 has been revised up to 120,000 MT
from an area of about 35,000 hectares. The country has a potential of
65,000 hectares that could be put under irrigated winter cereals.

Preparations for winter wheat production have started. The recommended
time of planting for winter wheat is from 1 April to 15 May. There is an
estimated 8,000 MT of wheat seed available for the 2006 crop. If all the
seed is used this would result in a crop area of about 88,000 hectares
at the seeding rate of 90kg/ha. However, the agricultural unions
representing producers have indicated that the country will only be able
to put a maximum of 35,000 hectares under wheat production in contrast
to the unrealistic government target of 110,000 hectares. Major
considerations influencing their projections include limited tillage
capacity, poor availability of inputs such as fertilizer and chemicals,
high production costs and disincentives such as the controlled market
and late payments for the crop by the GMB.

Although there is potential to rehabilitate irrigation schemes so as to
utilize the entire 65,000 hectares for winter cereal production this
will not be achieved this season. The Irrigation Association of Zimbabwe
estimates that complete rehabilitation of the irrigation schemes would
take 3 to 4 years.

Wheat production has declined substantially from 329,000 MT in 2001 to
120,000 MT in 2005. Some of the main constraints to wheat production are
inadequate tillage capacity, late planting, a controlled market for the
commodity, the unknown producer price, late payments for crop
deliveries, insecurity of land tenure, unavailability of inputs
(fertilizer, fuel and chemicals) and erratic power supplies for
irrigation.

Production will be encouraged if free marketing of wheat is introduced,
a pre-planting price that ensures viability is offered to producers,
producers are guaranteed security of tenure; there is timely
availability of critical inputs and if power supply is reliable.

###### Consumption

Bread is the second most important food after corn particularly in the
urban areas. There is a link between the consumption of wheat and that
of corn where wheat consumption increases if corn availability is poor.
Due to the limited availability, GMB has been rationing wheat to
millers. Since the beginning of January 2006 weekly allocations of wheat
to millers have been reduced to 4000 MT or 208,000MT per annum against
an optimum national requirement of about 350,000MT per year.

## **Trade**

Since August the country has not imported any wheat due to
unavailability of foreign currency.