Zambia’s Record Corn Crop Signals Inflation Is Set to Cool

Zambia’s maize harvest will more than double from last year’s 16-year low to a record, the government said, in a move that could help curb soaring consumer prices and raise the prospect of rate cuts.

Farmers produced an estimated 3.66 million tonnes of the staple crop, up from 1.5 million tonnes a year earlier, Acting Statistical Controller General Sheila Mudenda told reporters in the capital Lusaka on Thursday. The harvest has risen after stronger rains as the southern African country recovers from last year’s El Nino-induced drought, the worst in more than a century. Food prices have soared, leading to costly imports.

The price of maize flour, used to make Zambia’s staple food nshima, a thick porridge eaten at most meals, rose 10.2% in April from a year earlier. Food and non-alcoholic beverages make up more than half of the country’s inflation basket. Food price growth began to slow in March for the first time in more than a year.

The government expects inflation to return to the central bank’s target range of 6 to 8 percent by the end of the year for the first time since May 2019.

The effects of last year’s drought, which destroyed more than half of Zambia’s cropland, are still being felt. Even before the harvest, a farmers’ lobby group called on the government to quickly ease regulated exports, warning of the risk of a collapse in maize prices.

While food production is recovering in Africa’s second-largest copper producer, its power sector is still feeling the effects of the drought. Water levels in hydroelectric dams remain low, with the largest, Kariba, requiring years of good rainfall to fill. Hydroelectric turbines generate more than 80 percent of Zambia’s electricity.

Tags: corn, crop forecast, Zambia