A record global grain harvest has done nothing to help Jailos Kamuloni feed his family in Malawi, where costs have skyrocketed for the corn flour used to make the thick nsima porridge that people eat at almost every meal.
In parts of southern Africa, drought damaged crops and cut food supplies for countries lacking the resources to import cheaper grain from outside the continent. While corn futures in Chicago have plummeted to the lowest in three years, the price in Malawi jumped 20 percent in the past month. It would cost Kamuloni 60 percent of his monthly security-guard salary of 15,000 kwacha ($34.93) to buy a 50-kilogram (110-pound) bag of corn flour, enough to feed his family for a month.
“The corn price is way above my means,” Kamuloni, a 40-year-old father of four, said while shopping at a market in Malawi’s commercial capital, Blantyre. The family can no longer afford to eat three meals a day, and Kamuloni now buys only 1-kilo flour bags, he said.
Dry weather and increasing demand are exacerbating shortages in parts of sub-Saharan Africa, home to a quarter of the world’s undernourished people. Five of the six biggest corn-consuming countries per capita are in southern Africa, and higher costs for the food staple have a disproportionate effect on poor nations including Malawi, where people spend about half their wages on food, according to the United Nations.
World food prices tracked by the UN tumbled 14 percent since reaching a record in February 2011 and are lower than a previous high in 2008, when a food crisis sparked more than 60 riots globally over a three-year period, according to the U.S. State Department. The drop reflects record crops from the U.S. to Ukraine that sent grain costs down 23 percent last year as the world food-import bill fell 3.2 percent to $1.15 trillion.
Sub-Saharan countries missed out because they rely on local supply, including from South Africa, the continent’s top exporter. Corn costs in Zambia rose 35 percent last year and 38 percent in Harare, Zimbabwe, through November, UN data show. In Lilongwe, Malawi’s capital, the price jumped 70 percent to 139.90 kwacha, or 33 cents a kilo. That’s about $8.38 a bushel, compared with Chicago Board of Trade futures that closed Jan. 17 at $4.24, down 50 percent from a record $8.49 in 2012, during a U.S. drought. Corn was unchanged in Chicago today.
“Prices generally are much higher in Africa than the rest of the world because of booming demand,” said Edward George, the head of soft commodities research at Lome, Togo-based Ecobank Group, which operates in 34 African countries. “It’s grown in most countries, but what they grow is still not enough.”
In Zimbabwe, the biggest corn importer in the sub-Saharan region, production slid 17 percent from a year earlier because of dry weather, boosting its total grain-import requirement to 765,000 tons, 23 percent more than the prior season, the UN said. The country faces an “exceptional shortfall” in aggregate food supplies, with 2.2 million people expected to experience food insecurity through March, according to the UN.
Lack of rain also raised concern for the next season’s harvest in South Africa, and in Zambia, where late-delivered fertilizers mean production “could nose dive to record-low levels,” the National Farmers Union said Jan. 10, without providing a crop forecast.
March-delivery white corn, used for food, surged as much as 28 percent since the end of October to 3,040 rand ($280.81) a ton today in Johannesburg on the South African Futures Exchange, the highest ever for the contract. Chicago corn futures slid 1.1 percent over the period, while the Standard & Poor’s GSCI Agriculture Index of eight contracts dropped 5.2 percent. The MSCI All-Country World index of equities advanced 2.4 percent, while the Bloomberg Treasury Bond Index fell 0.6 percent.
At the end of November, South African inventories of all varieties of corn were 20 percent smaller than a year earlier, the most recent data from the Grain Information Service showed. The nation’s exports since the beginning of May are up 49 percent from a year earlier, spurred by increasing demand for food grain in Zimbabwe and for yellow corn used for livestock feed in Japan, Taiwan and South Korea, according to the agency.
“The recent price increases have mainly been influenced by internal supply and demand factors,” said Jonathan Pound, an economist at the UN Food & Agriculture Organization in Rome who monitors grain supplies in southern Africa. “If prices persist at this level in South Africa, it could have an impact on domestic prices for some importing countries and a negative impact on consumers.”
Of the 842 million people worldwide who were undernourished from 2011 through 2013, more than 222 million were in sub-Saharan Africa, the FAO estimates. While U.S. shoppers spend about 6.6 percent of their income on food, the lowest of any country, according to the U.S. Department of Agriculture, the UN estimates people in Malawi spend about 54 percent of their wages to eat, while in Zambia, it’s 42 percent.
About 80 percent of Malawi’s workforce is employed in agriculture, with most land in the hands of subsistence farmers cultivating less than 1 hectare (2.5 acres), according to the International Fund for Agricultural Development. Malawi has contended with rampant inflation since it devalued its currency by a third in May 2012 in order to meet International Monetary Fund conditions to receive aid.
At a political rally Jan. 10, President Joyce Banda, who is seeking re-election in May amid cuts in humanitarian aid and public anger over official corruption, acknowledged that hunger in Malawi has reached a critical point and that her government would ensure domestic supplies are available.
“If the president doesn’t do something, the acute shortage of food will cost her votes,” said Michael Gwaza, 33, who sells corn flour for 120 kwacha a kilo at Blantyre market.
An estimated 1.86 million people will need food assistance before the harvest starts in March, the Malawi Vulnerability Assessment Committee said. Even though the country will produce about 3.6 million tons of corn, about the same as last year, drought sparked localized shortages, and high fuel costs mean it’s expensive to transport grain from regions of surplus to those in deficit, according to the UN.
Zimbabwe expects imports to help meet its shortfall. The government said Jan. 3 it planned to buy 150,000 tons of white corn from South Africa in addition to 150,000 tons from Zambia. South Africa’s exports to Zimbabwe since the beginning of May were about 159,000 tons, compared with nothing in the same period a year earlier, according to the Grain Information Service.
As South Africa’s inventories shrink, the country may need to look outside the region to meet domestic needs, Ecobank’s George said. In the 2011-12 marketing year, South Africa imported more than 287,000 tons of corn from Romania and Ukraine, the Grain Information Service estimated.
South Africa’s largest food company, Tiger Brands Ltd., said Jan. 10 that it planned to pass on part of the rising local cost of grain to customers. The company may consider importing corn if supplies tighten further, spokesman Alex Mathole said.
Unlike South Africa, it’s difficult for landlocked countries including Malawi, Zimbabwe and Zambia to boost imports from outside the region because they have weak currencies, trouble accessing credit or under-developed infrastructure, George said.
International aid agencies will provide some relief. The World Food Program said Jan. 14 that it will distribute food and, in some cases, cash to 1.8 million people in Zimbabwe in the next few months. The program said it needed to raise $60 million to meet demand.
Higher corn prices already are “like a punishment,” said Appropriate Tambodzika, a 45-year-old father of two who’s a chrome miner in Zimbabwe’s Mutorashanga district, 60 miles north of Harare. Tambodzika also farms one hectare of corn and one hectare of tobacco to feed his family and supplement his income. Because that harvest won’t be ready until March or April, he and his wife Esther plan to skip meals so they can continue to pay their children’s school fees.
“We will struggle more this year,” he said.