Regionally-produced maize grain, dry beans, and rice, and re-exported wheat and wheat flour were the most traded commodities in the region in the fourth quarter of 2018.
According to the latest issue of the East Africa Cross-border Trade Bulletin, staple food commodity prices including maize and sorghum followed seasonal patterns across most markets in Eastern Africa.
The prices remained below last year and five-year average levels in most markets in Kenya, Uganda, Tanzania, and Ethiopia because of average-to-above average harvests and carryover stocks from the previous harvest.
In Rwanda, Burundi and South Sudan the main drivers for the lower prices were availability of other substitutes including grains, roots and tubers, in addition to regional imports.
“The prices were under upward pressure towards the end of the year in Somalia because of expectations of below average January-to-February harvest, and in Ethiopia because of civil unrest related trade disruptions and high inflation. Maize prices remained highest in South Sudan and Burundi because of the lingering effects of domestic conflict and poor economic situation. Livestock prices across most reference markets remained stable at elevated level because of good animal body conditions as a result of prolonged good rangeland conditions.” Reads the bulletin in part.
The estimated volume of maize grain traded in the region in the fourth quarter of 2018 (October-to-December) was 111,000 Metric tons, which was similar to the previous third quarter (July-to-September).
This was however seven and eight percent lower than the respective quarters in 2017 and five-year average level.
The seasonal decrease in maize trade was attributed to high maize availability among most countries in the region following the October-to-December harvest. Uganda, Tanzania and Kenya accounted for 57, 32 and nine percent of the total exports respectively.
The main destinations for the regional exports were Kenya, South Sudan, Rwanda and northwestern Tanzania which accounted for 56, 17, 15 and nine percent of the total respectively.
The study states that the seasonal reverse flow of maize from Kenya to northwestern Tanzania including the major markets of Musoma and Mwanza, attracted a seven percent price premium because the Kenyan maize was well-dried, sorted, and packed in standard 90kg bags, thus reducing costs to Tanzanian millers.
Maize exports from Uganda to South Sudan surged by 167 percent above recent five-year average level, as staple food businesses started expanding in Juba in expectation of implementation of the 2018 Peace Agreement. Still traders were capitalizing on high turnovers with minimum storage due to high risks in the market. Exports to Rwanda from Uganda and Tanzania was also above average because of structural deficit in production amidst growing demand for maize and flour for domestic consumption and re-exports to eastern Democratic Republic of Congo (DRC).
Sorghum prices in the main producing Uganda and Sudan are the lowest in the region. Inflation and unrest-related market disruptions have sustained higher sorghum prices in Ethiopia, another main producing country.
Exports from Ethiopia to other regional markets are expected to be restrained because of lack of competitiveness except for localized cross border trade while exports from Uganda to South Sudan will likely increase as the calm before the implementation of the Peace Agreement in South Sudan pulls more supplies into the country.
However, these Uganda sorghum exports to South Sudan and Kenya will likely be curbed by increasing demand for sorghum in domestic alcohol production.
The study however predicts that Sudan sorghum exports to the regional markets will likely increase because of competitive prices but be dampened by high transport costs.
Locally produced rice prices in Tanzania are expected to remain high because of a premium it attracts on its qualities and high demand in Kenya, Uganda, Rwanda, Burundi, DRC and South Sudan. Rice re-exports from Somalia are expected to remain the lowest in the region.
Exports and re-exports from Uganda to South Sudan will likely increase as continuation of calmness in South Sudan slowly improves economic activities and demand. Re-exports of overseas rice from Somalia to eastern Ethiopia is anticipated to increase towards the May-to-June Ramadhan period supported by liberation of both domestic and regional trade in eastern Ethiopia by the government.
Prices of dry beans in Uganda and Burundi are expected to remain among the lowest in the region because of consecutive seasons of above average harvest amidst high carryover stocks. Exports from Burundi to Rwanda are still banned.
Meanwhile, exports from Uganda to Kenya, Rwanda, and South Sudan, in the first half of 2019 are expected to remain exceptional because of abundant availability and lower prices.
Exports of the small bean variety from Rwanda to Uganda are expected to increase seasonally in the second quarter of 2019 following the January 2019 harvest while exports from Ethiopia to Kenya and Sudan are expected to increase from October 2018 through.