RATIN

Tanzania maize export ban rattles EAC food market

Posted on August, 22, 2017 at 10:47 am


Tanzania’s ban on maize grain exports to assure the country’s food security and to encourage value addition through exports of flour, will likely move regional cross-border trade to informal channels because of porous borders, according to a regional bulletion for cross border trade.

The East Africa Cross Border Trade Bulletin the ban will also increase the maize export prices because of additional of costs of circumventing the ban.

The primary impact of the ban at local market level, is real and perceived shrinkage of the staple food market by exclusion of markets in the neighboring countries, increase in domestic supply, and downward pressure on local prices.

On the consumption side, declining prices, continue to support food accessibility for most net-buying households especially in the urban areas and deficit food producing rural areas; improving short term food insecurity in most parts of the country.

At the farm-level, especially among the net-selling households, there is increased household availability, reduced farm income, diminishing purchasing power, a disincentive to produce key staple food crops, and diversity to other high paying crops in the upcoming season, that will most likely result in lower 2017/2018 harvest, thus exacerbating food insecurity in some parts of the country.

Volumes of informal maize grain traded in East Africa occupied the dominant share of informal commodity trade monitored during the second quarter of 2017, occupying nearly on third of total trade volumes.

This share is up marginally by 4 percent when compared to the previous quarter following the start of May-to-August harvest in some parts of the region. Dry beans became the second most traded commodity in the region displacing rice following the start of May-to-August harvest in most countries.

Locally produced rice was the third most traded commodity as Tanzania traders continued to move away from mixing Asian and Tanzania’s rice, which had attracted higher East Africa Community external tariff.

Livestock trade in the region declined unseasonably with exports from Ethiopia to Somalia affected by poor animal body conditions, while conflict-related trade disruptions continued to adversely affect livestock exports from Uganda to South Sudan.

Supplies from Somalia to Kenya decreased seasonably because animals were retained for fattening. - Regional cross-border trade in staple food commodities between July 2017 and June 2018 is expected to slightly lower than 2016/2017 period which was low when compared to five year average, because of projected slightly below average harvest in the main source countries.

However, overseas imports by Kenya are expected to increase.

Source: Daily News