Marketing Policy Options for Consumer Price Mitigation Actions in the 2008/09 Maize Marketing Season in Zambia.

1) Maize prices are rising rapidly in 2008 and are fast approaching import parity levels. 2) Maize traders, millers and farmers all agree that Zambia will likely require imports by early 2009 in order to avoid domestic maize supply shortages. 3) Official food balance sheets appear to have underestimated the demand for maize this year. They may also have slightly overestimated the size of the 2007/08 maize crop. Hence the slow government recognition of the need for maize imports. 4) As of late September 2008, neither the Government of Zambia (GRZ) nor the private sector have arranged to import maize from South Africa. Trade sources suggest informal imports from Tanzania are helping to relieve the likely shortfall. 5) Zambian policy makers face a delicate balancing act: they need to maintain remunerative prices for farmers, in order to stimulate maize supply response during the coming 2008/09 production season, while at the same time moderating maize meal price increases to protect urban consumers and the many rural households who are net buyers of maize. 6) The time to respond to this balancing act challenge is now rather than later in the marketing season when costs of supplies and transport will increase. 7) Several policy actions offer potential win/win options for balancing these twin concerns: