The global food market is expected to remain stable this year following an abundant harvest last year of cereals and other plant-based products.

According to the Food and Agriculture Organisation (FAO), the food price index recently fell to a four-year low, eliminating the volatility that characterised the global food commodity market in 2008 and 2011.

The organisation’s experts predict stability in the food market to continue in 2015 given last year’s high production of the world’s major staples, but only if the favourable conditions in the agricultural sector continue.

FAO’s positive outlook is good news for East African states, which are still struggling to be food sufficient and face even bigger challenges in view of the threat posed by climate change.

Anthony Kioko, the chief executive officer of Kenya’s Grain Growers Association, agreed with FAO’s prediction, saying the food market has been good so far and the same is expected this year if the rainfall patterns remain favourable in this region.

“Most of the agriculture practised in East Africa is rain-fed and we expect to have normal production this year as long as we record good rains,” said Mr Kioko.

High food prices have always been a major driver of inflation in the region, eroding the purchasing power of local currencies and driving many into poverty. In June 2011, for example, the inflation rate in Kenya rose to 14.95 per cent, driven by high food and fuel prices.

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However, in the recent past, low food prices and a sharp decline in the cost of crude oil, have helped keep inflation rates at single-digit levels in the region, with Burundi having the highest at 9.7 per cent, followed by Kenya at 6.02 per cent and Tanzania at 4.8 per cent. Rwanda has the lowest rate at 0.7 per cent and Uganda has 1.8 per cent.

However, the experts point out that the situation will remain positive only if there are no dramatic upsets in the global weather patterns this year.

Rice is the only major cereal that many African countries are expected to increase production of, for importation. According to FAO, the importation of the cereal by African states will increase by about three per cent this year — they are expected to import 14.4 million tonnes, or 36 per cent of the world total.

In Kenya, for example, rice is the most important cereal food crop after maize and wheat. However, the country is only able to meet 20 per cent of its consumption needs due to production inefficiencies and increased demand.

The National Irrigation Board estimates per capita rice consumption at 7kg but it is projected to rise to 11kg this year.
Kenya’s Ministry of Agriculture estimates annual consumption will increase at a rate of 12 per cent compared with four per cent for wheat and one per cent for maize, which is attributed to a progressive change in eating habits particularly for urban consumers. The country imports between 350,000-400,000 tonnes of rice a year.

Uganda, on the other hand, imports approximately 120,000 tonnes of rice annually, according to figures released by the United States Department for Agriculture.

In Tanzania, rice production has steadily increased in the past decade and the country has shifted from being a net importer to an exporter of small quantities to regional markets. However, production has remained unsteady, and in 2013 runaway inflation forced Tanzania to temporarily lift a ban on rice imports and allow in at least 60,000 tonnes to make up for a shortfall in local harvests.

Global wheat production was expected to reach 718.5 million tonnes in 2014 — a marginal increase from the 2013 record output.
“This forecast is slightly higher than what was reported in September, largely due to upward revisions in the Russian Federation and Ukraine,” said FAO. The bulk of the wheat imported by the EAC member countries comes from the two Eastern European countries.

In recent years, wheat has become a popular cereal, especially among the middle class in the region, as it can be used to prepare a variety of dishes. The availability of wheat in the world market is good news mainly for Kenya, since it not only produces the highest volume of wheat in the EAC, but also imports the highest amount.

“Demand for wheat and wheat-based products cannot be met by domestic production. Domestic production only meets a third of national wheat requirements with imports filling two-thirds,” said the United States Department for Agriculture in one of its reports on Kenya’s agriculture sector.

Averages for the past five years, including estimates for 2012/2013 financial year, show that Kenya produced 247,000 tonnes of wheat on an area of 130,000 hectares but imported 879,000 tonnes. Tanzania produced 93,000 tonnes on an area of 96,000ha and imported 608,000 tonnes in the same five-year period. Uganda produced 24,000 tonnes on an area measuring 14,000ha but imported 155,000 tonnes.

Rwanda produced 81,000 tonnes on an area of 58,000ha and imported 16,000 tonnes while Burundi produced 9,000 tonnes on 10ha but imported 5,000 tonnes.

The average production per hectare is 1.5 tonnes/ha, with the highest being Kenya at 2.2 tonnes/ha and the lowest being Burundi at 0.9 tonnes/ha.

Mr Kioko predicts increased wheat production this year as some farmers in Rift Valley are expected to switch from maize to wheat due to the lethal necrotic virus outbreak.

The other challenges maize farmers have encountered are an overall decrease in area cultivated, and delayed and inadequate supply of government subsidised fertilisers at the planting stage.

“World wheat trade in 2014/15 (July/June) is set to contract to 150 million tonnes, 7.3 million tonnes (4.6 per cent) below the record level of 2013/14. The reduction can be attributed to lower import demand in Asia and Africa, more than offsetting a rise in Europe,” said FAO.

The organisation had initially predicted that global maize output for 2014 would reach 1,018 million tonnes, 0.7 per cent above the record output in 2013, a sign that maize — Kenya’s leading staple food — will also be readily available in the world market.

Increased production in China and the United States, as well as significantly higher outputs for the EU and the Russian Federation, is expected to keep global prices of maize at reasonable levels.

Due to poor harvests last year, Kenya, for example, was forced to import maize from Uganda and Tanzania to offset a supply deficit. This was possible because maize is not the leading staple food in the two neighbouring countries.

Uganda, which normally produces surpluses, has been exporting up to 60 per cent of its maize to South Sudan and Kenya, while Tanzania has been selling its surplus crop to Malawi.