Transcription
Can Zambia import at least 200,000 tons of wheat over the next three to four months?
In this week's African agry overview, proudly brought to you by Collateral Management International and the magic irrigation systems, we investigate. Collateral Management International, or CMI, works across the continent helping banks and other financiers keep their commodities secure and well-managed. With over a decade of experience, they're known for their reliable storage solutions, trusted staff, and professional stock monitoring and inspection services. CMI helps make everything run smoothly and securely. CMI, your trusted collateral manager in Africa.
The latest grain prices in Lusaka traded as follows: Maize on $172 per metric ton; soybeans on $500; soy meal on $520; wheat on $460; wheat bran on $130; while maize bran traded on $115 per metric ton. Remember, if you'd like more detail on these markets and what's driving these price movements, or become one of our sponsors on this video, be sure to get in touch with us now.
And with that, let's hand over to J Pinar for this week's update on the grain markets.
Welcome all viewers. This week we revisit the Zambia wheat market where record volumes have to be imported in a very short import window. The 2024-25 year SND forecast, running from September 2024 to August 2025, includes the small crop of 230,000 tons that harvested late 2024. It was reported that import volumes for the 2023 season, between April and September 2024, reached a record 160,000 tons. For the 2024-25 year, we expect import needs of at least 200,000 tons. This stock will be essential to keep the milling industry going until the new crop harvest from mid-September.
We will not endeavor to make a crop forecast for the 2025 crop, that will plant from May and harvest from mid-September. However, the outlook for this crop is favorable, with good dam fill due to favorable summer rains, which should support irrigation farmers from both a water and electricity perspective. Observers do not expect load shedding will disappear completely, but it is likely to be significantly less compared to the previous season. At least a normal crop of around 350,000 tons is possible, which will see a smaller 2026 import need.
The government has given approval for 250,000 tons of imports for 2025, but the SI to allow duty-free imports has not been formally gazetted. That said, since early April, imports have been allowed to come in duty-free, i.e., as if the SI has been gazetted. Normally, the government reinstates import duties September 1, just before the local crop harvest, to protect local farmers against low prices importing 200,000 tons. The minimum import requirement, in our opinion, between April and August is a tall order. Rumors are doing the rounds that import duties could be reinstated as early as August 1 this year, which will further shorten the import window.
We flour export to the southern DRC remains healthy and should continue. Tanzania imports wheat, mills it, and then exports the flour to, amongst other destinations, the DRC. However, the Tanzanian wheat import duty is at 10%, and with the Zambia duty scrapped, Tanzanian wheat flour will struggle to compete with Zambian origin in the southern DRC. Due to a lack of milling capacity, the southern DRC mainly imports wheat flour. This graph shows the Lusaka wheat price history for the past five years. Very little tradable local stock is still available. So the market price has defaulted to duty-free import parity at $460 a ton. Current Lusaka price for Australian APW: $460 a ton (see the red line) and South African origin: $490 a ton (see the blue line). Our context indicates that African origin is better quality, and both origins are being imported.
It seems the majority of deep-sea imports will be routed through Durban port. There was talk early on that the Walvis Bay port could also be an option, but now seems unlikely, maybe next year. Import parity should drive prices for the next three to four months.
Next week we will look at the Mozambique maize market and, in particular, investigate how this market could be impacted by the current forex crisis. Remember, quality information improves decision-making. Contact us for more detailed information. Thank you, Joke.
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A big thank you again to our sponsors, Collateral Management International and ZMAT Irrigation Systems, for making this content possible. Remember, if you're interested in becoming a sponsor or subscribing to more detailed market reports, contact us today.
I'm Dr. Johnny van We. Thanks for watching, and don't forget to join us again next week for more insights and updates on the African grain markets.