Changes in sub-Saharan maize trade spell potential problems for Kenya


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Maize production in some of the sub-Saharan African countries that dominated corn supplies during the 2021/22 marketing year is expected to be lower this coming season. This will lead to changes in the subcontinent’s maize trade in the 2022/23 marketing year, particularly creating complications for Kenya. In the 2021/22 season, Kenya was the largest maize importer in the region.

But Kenya has a longstanding policy against genetically modified maize. This limits the role of South Africa, the subcontinent’s largest maize producer and exporter, in meeting Kenya’s needs.

The expected drop in production comes during a season when demand for maize from countries in sub-Saharan Africa that are heavily dependent on imports is expected to remain strong. It is estimated that Kenya, for example, will have to import 700,000 tons of maize for 2022/23. Kenya’s maize production is expected to be slightly higher, but not enough to meet the country’s needs.

Kenya is generally one of the major maize importing countries in sub-Saharan Africa. The country plans 700,000 tonnes of maize imports account for 21% of the region’s expected maize imports of 3.4 million tonnes for the 2021/22 season, according to data from the International Grains Council. Other typical maize importing countries are Zimbabwe, Botswana, Mozambique and Namibia.

However, in the 2021/22 marketing year, several countries in sub-Saharan Africa such as Zambia, Tanzania, Zimbabwe (an exceptional year compared to the usual import position) and South Africa had a bountiful corn harvest. This has allowed them to easily meet Kenya’s import needs. Tanzania and Zambia were Kenya’s main maize suppliers.

Tanzania, the region’s largest exporter in the 2020/2021 season and Kenya’s main traditional maize supplier, is unlikely to play that role this season as its maize production is expected. down 16% year-on-year at 5.9 million tons. This is due to drought early in the season, combined with army worm infestations and reduced fertilizer use in some areas due to prohibitive prices. The consequence of lower production and firmer domestic consumption means that the country may have less maize available for export markets.

Preliminary estimates according to the United States Department of Agriculture, maize exports from Tanzania could increase from 800,000 tonnes in marketing year 2021/22 to 100,000 tonnes in marketing year 2022/23.

Such a drop would leave very little for Kenya’s maize needs, leaving Zambia and South Africa as the main suppliers to the region.

Zambia’s expected maize production in the the current season is still provisional, and it is unclear how much corn the country might have for export. Zimbabwe, which had a big harvest of the 2020/21 season, is also in an uncertain position regarding its 2021/22 maize crop and ability to export. The incoming evidence suggest that parts of the country have suffered poor harvests.

South Africa could help and has the maize production capacity to do so. Given current production projections of 14.7 million tonnes, South Africa could have 3.2 million tonnes of maize to export in the 2022/23 season – about 78% yellow maize and 22% white maize. But it plays a limited role in the Kenyan maize market.

Barriers

South Africa’s limited participation in the Kenyan maize market is arguably affected by regulations rather than prices and consumer preferences. Kenya continues to maintain a ban on the import of genetically modified products.. This limits imports from South Africa where more than 80% of maize production is genetically modified.

There are indications that Kenya change its long-standing policy. Regulatory agencies recently completed all testing for approval of biotech corn. But any decision would still have to be approved by Kenya’s cabinet.

Even if Kenya were to adjust its policy, South Africa would not necessarily be the only maize supplier seeking to increase its market share in the country. Countries like the United States and Brazil would also be on Kenya’s doorstep. South Africa’s advantage would be its substantial production of white maize, which is the preferred staple cereal for Kenyan consumers.

Outside the African continent, Mexico, the United States and Argentina could be among the potential maize suppliers, as there are usually few white maize producing countries in the world.

Imbalances

Maize trade in sub-Saharan Africa generally shows some imbalances. South Africa, Tanzania and Zambia are the major maize producers and exporters in the region. For their part, Kenya, Zimbabwe, Botswana and Mozambique are often the importers.

Regionally, sub-Saharan Africa’s total maize imports average 3.4 million tonnes per year, according to International Grains Council data. It is both white corn and yellow corn, with most being white corn for human consumption.

Although intra-regional trade accounts for most of the consumption needs of import-dependent countries in the region, it is also supplemented by imports from countries outside the continent such as Argentina, Canada and Mexico.

Overall, these maize market dynamics are worth watching, particularly from the perspective of South Africa, as they signal that demand for sub-Saharan maize in the 2022/23 marketing year could be much larger than the previous season. This could be the case especially if maize production in zambia comes out lower than the 2021/22 season, which is likely if we use the South African maize production conditions as a barometer of the region. Such a potential increase in maize imports from the region would have an impact on prices.

*Wandile Sihlobo is a South African agricultural economist and author of Finding Common Ground: Land, Equity and Agriculture. Twitter: @WandileSihlobo

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