Market update 30 June 2016
1. Staple foods
Maize Grain: There was a slight decrease in the price of maize grain from $0.40/kg ($7.00 per bucket) to $0.39/kg ($6.83 per bucket) from that of mid-June. This has been attributed to private traders continuing to tame their prices to meet that of the Grain Marketing Board. Maize grain continues to be available from the GMB and grain selling points at the controlled price of $22.50 per 50kg bag and at $15.00 per 50kg special price for rural communities. Farmer maize sales and the unrestricted movement of grain across provinces and districts have continued to promote the availability of the product on the informal market.
The number of grain traders has generally decreased across the 15 districts while the few remaining had reduced prices to match that of GMB. In Matabeleland North the average selling price for maize grain decreased to $0.34/kg ($5.95 per bucket) from $0.36/kg ($6.30 per bucket) at Mid-June. In the Midlands province, the average price of maize grain decreased to $0.35/kg ($6.13 per bucket) from $0.38 ($6.65 per bucket) at mid-June. In Gokwe South average selling price of maize dropped to $0.20/kg ($3.50 per bucket) from $0.29/kg or $5 per 20 litre bucket. Figure 1 shows the price trends of maize grain.
Informal traders continued to source maize grain from multiple source markets. In Mberengwa the traders were sourcing from local farmers with irrigation plots. In Shurugwi and Masvingo Rural districts, informal traders continued to source maize from farmers in Gokwe South, Hurungwe and Chikomba. In Gutu informal traders were sourcing in neighbouring Chikomba district and Seke (Beatrice farms) of Mashonaland East province and Chipinge district of Manicaland province some 300km away. In Zaka district traders were sourcing grain from Chikomba and Seke (Beatrice farms) with few going as far as Bindura. Traders in Matabeleland North (Lupane, Umguza and Nkayi) continued to rely on farmers in Gokwe South and Gokwe North. Of the traders interviewed, those who used to import from Zambia had ceased to do so as it was no longer profitable due to the availability of maize from nearer sources within Zimbabwe.
The GMB continues to be the major source of maize grain across the 15 districts. Maize grain from GMB was available at established selling points (average of 5 grain selling points per district) in all the 15 districts where maize grain was selling at $22.50 per 50Kg bag or $0.45/kg. As reported last Month (end of May), Gokwe North GMB depots and its 3 grain selling points continued to face logistical challenges and by end of June, they only had grain stocks for the Drought Relief Vulnerable Population Social Services Scheme. In Nkayi this subsidised commercial maize grain was not available. Matobo district continues to have one grain selling point, Maphisa GMB Depot. In Zaka, the GMB closed three of its selling points citing high operational costs and low business. As was the situation by end of May, the government special Rural Grain Facility, where a 50kg bag is sold at a subsidized price of $15, continued to be operational across the 15 districts targeted by the CTP project except Nkayi, Umguza and Gokwe North.
i. Maize Grain Price Trends at District level
The selling price of maize grain was stable across all districts compared to end of May. This was due to maize availability from all source markets particularly the GMB. Umguza and Gokwe South experienced price decreases. In Gokwe South average selling price dropped to $0.20/Kg from $0.29/Kg in mid-June. Farmers were observed to be selling maize from their harvest. Local Millers were also sourcing maize grain from farmers in nearby Kwekwe Rural district. In Umguza the price of maize grain dropped to $0.28 from $0.34/kg mainly due to competition from the influx of informal grain traders in the district whose source market was Gokwe North and South. The highest maize price was observed in Umzingwane, averaging $0.55 per kg and there was no change as in Mid-June. Figure 2 shows price trends for maize grain for the period October 2015 to mid-May 2016 for selected CTP districts.
Maize Meal:
Maize meal (both imported and local) remained readily available from retailers across all the districts. The average maize meal price remained firm at $0.57/kg from that of Mid-June. The GMB continued to sell mealie meal at an average price of $0.46/Kg in all the districts other than Matobo, Gokwe South, Umguza and Nkayi. The source markets for maize meal continue to be the nearby major towns/cities and outside the country (South Africa and Botswana). Downward price changes were noted in Gokwe South only, with the product now selling at an average price of $0.56/Kg from $0.60 at Mid-June. A new Supermarket opened at Gokwe centre during the month which was selling a variety of mealie meal brands at prices ranging from $0.40/Kg to $0.56/kg. In Umguza the price of mealie meal increased to $0.55/kg from $0.50/kg in mid-June. In Beitbridge the price increased to $0.60/kg up from $0.59 in mid-June. The price surge in maize meal prices for these two districts was attributed to increased demand owing to limited supply of maize grain.
Small Grains: Sorghum was available in all the districts other than Matobo, Insiza, Umzingwane, Masvingo Rural, Zaka and Gokwe North districts. Its average selling price was $0.68/kg down from $0.73/kg by mid-June. Millet remained very scarce and only available in nine districts namely Lupane, Nkayi, Beitbridge, Gwanda, Gokwe South, Mberengwa, Shurugwi, Gutu and Zaka at an average price of $0.68/kg as was in mid-June. In Shurugwi, sorghum and millet were also available at the main GMB- Tongogara Depot. Rice was readily available across all districts at $0.95/kg up from $0.94/kg at mid-June.
2. Non Staple Foods
Pulses: For all pulses save for cow peas, there was an upward increase in price from mid-June. The price increase was attributed to low supply due to poor harvests of these pulses which are expected to last till August from Agritex reports. The average price of cow peas remained firm at $1.45/kg while that of sugar beans increased to $2.21/kg from $2.18/kg by mid-June. Average selling price for groundnuts, unshelled and shelled increased to $1.30/kg from $1.14/kg and $2.86/kg from $2.80/kg respectively.
Other non-staple foods: The average selling price of cooking oil remained firm at $1.91/litre as at mid-June. Across districts local brands of cooking oil namely Zim Gold and Pure Drop were observed to be dominating the market and readily available. Imported brands were not visible across the districts. The availability of imported food items in the market is expected to decrease following the blanket ban of several food items (including cooking oil) courtesy of Statutory Instrument No. 64 of 2016. The average selling price of kapenta increased to $0.92/kg from $0.90/kg at mid-June. Salt and sugar were also readily available across all the districts and prices have remained stable as shown in Figure 4.
3. Cash Liquidity Situation
In the light of the liquidity crunch affecting the Zimbabwean economy, the project found it prudent to continuously assess the liquidity situation amongst mobile money agents in the project’s operational wards. For this period of end of June, a total of 750 CTP beneficiaries across the 15 districts were interviewed in order to assess whether they had managed to cash out their May 2016 entitlements. In each district, 5 wards were targeted, from which 5 major business centres (one per ward) were selected for the assessment to give a total of 70 business centres. Across the 70 business centres there are 328 functional Ecocash agents (236 agents and 92 merchants). Fifty (50%) percent of these were interviewed. For those who failed to get all the cash, a question was asked about the mitigation measures they were invoking.
i. Ecocash Agents
Twenty five (25%) percent of the Ecocash Agents were offering withdrawal/cash out limits to clients compared to thirty percent (30%) in Mid-June. Three quarters (75%) of the Ecocash Agents noted that they were not offering any cash out limits to clients, improvement from 70% in Mid-June. All Agents interviewed in Nkayi, Umguza, Beitbridge, Gokwe South and Mberengwa noted that they were not offering cash out limits to clients. Ten percent of the EcocCash agents in Masvingo, Matobo (12%), Gokwe North (20%), North (25%), Zaka (30%), Insiza (33%), Gwanda (40%), Gutu (60%) and Shurugwi (60%) were offering cash out limits to clients. Agents in Masvingo Rural and Zaka were offering on average $20/client while those in Shurugwi were $40/client, Insiza and Umzingwane $50/client, Matobo $175/client and Gwanda $300/client. The difference in the levels of cashing-out limits imposed by agents was due to different levels of demand of money in the rural areas. Figure 5 below shows the percentage of agents giving cash limits and Ecocash clients accessing all cash they wanted to cash out.
ii. Clients
A total of 750 individual CTP clients were interviewed across the 15 CTP districts. Seventy One percent (71%) of them had managed to cash out all the money they required (a slight increase compared to 70% that managed to cash out all the money they required in mid-June). Of the clients interviewed, clients in Beitbridge, Insiza and Lupane had managed to cash out all the money they needed. Umguza (10%), Shurugwi (18%), Umzingwane (28%), Mberengwa (42%) and Zaka (42%) were the districts with respondents that had failed to cash out. For those that failed to get all their money, 48% indicated that they would wait until the local agent had cash, 18% would travel to major towns to cash-out, 12% used electronic purchases- e-purchase (bought directly through their e-wallet), 8% would stagger cashing outs, 10% staggered e-purchases, 3% saved while 1% cashed-out from non-mobile money agencies. The general impression from the liquidity assessment was that although the Ecocash agents had limited cash floats during the peak cashing-out periods, as long as food commodities continue to be available in the local shops, the CTP beneficiaries will not be stuck with the money in their e-wallet. The beneficiaries were buying food items from the nearby shops. For example, beneficiaries in ward 12 and 39 of Gutu were buying grain, mealie meal and other groceries, directly from their wallets from the nearby Ecocash merchants and local retail shops. There was evidence that the CTP beneficiaries were gradually embracing plastic money and e-buying. Nevertheless, the lack of hard cash from Ecocash agents was restricting beneficiaries’ choices in terms of shops to buy from as some traders were not accepting Ecocash transactions. In ward 12 of Gutu, 2 retail shops were charging higher prices on Ecocash transactions than on cash transactions. For example, a 20kg bucket of maize grain was selling at $7 under cash and $7.50 through Ecocash. The CTP project team is working closely with Ecocash and beneficiaries to report such cases as they should not be tolerated. The country’s liquidity crisis does not seem to be ending in the near future, and the project staff across the 15 districts will continue to encourage CTP beneficiaries to buy directly through their e-wallets instead of their traditional practice of cashing-out first and buying using the hard cash. It was clear from all the visited retail shops and informal traders that where information about the possible cash disbursements was shared with the traders, the traders had stocked the needed food items to meet the projected surge in demand from the injected cash.
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Figure 1: Price Trends for staple cereals
Figure 2: Maize grain price trends for selected districts
Figure 3: Maize Meal price Trends per Kg for Selected Districts
Figure 4: Price Trends for Non-Cereal Foods
Figure 5: Cashing out Practices by Agents and Clients
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