The Agricultural Commodity Exchange for Africa (ACE) says heavy maize imports by authorities and cooperating partners could lead to the collapse of local maize prices.
In a letter to its stakeholders signed by Chief Executive Officer, Kristian Moller, ACE said it has noticed with concern that government and food aid suppliers seem to restrict supply of local maize and only procure imported maize.
“There is no dispute that the country will need maize imports but the concern is that the current procurement strategy has removed demand for local maize, resulting in downward pressure of prices removing traders’ incentives to trade across markets and store maize to lean season.
“If the local maize prices collapse, it will have a significant impact on next year’s production,” Moller said.
He said ACE and the International Food Policy Research Institute will communicate the risk to development partners.
“Their concern will rightly be that we risk of running out of maize if they procure all local maize now and no imports were made.
“Therefore, to give weight to the argument, ACE would like to gather realistic information of current maize stock levels and the ability of the industry to respond to shortages with imports,” Moller said.
ACE has since asked stakeholders to furnish it with the necessary information on amounts of the grain available in the country to advance its arguments.
“ACE believes that maize procurement should not have any restrictions, all suppliers with maize of any origin should be able to participate. To achieve this, ACE needs to present a realistic case that the industry is able to respond to the food shortage in a timely and cost effective manner.
“It is very crucial to achieve this for a healthy and well-functioning maize market and for longer term food security,” Moller said.
Agricultural Development and Marketing Corporation (Admarc) Chief Executive Officer, Foster Mulumbe, last week told journalists that the grain marketer had spent K22.4 billion to buy about 100,000 metric tonnes of the grain from the local market.
Mulumbe said that Admarc will procure an extra 300,000 metric tonnes of maize by November to prop up maize stocks.
He said Admarc will source 100,000 metric tonnes of the stock from Zambia while the rest is expected to be purchased from Romania, Brazil and Mexico.