ZAMBIA: Fuel crisis may stall food imports

[ This report does not necessarily reflect the views of the United Nations]

JOHANNESBURG, 5 Oct 2005 (IRIN) - A fuel crisis in Zambia will hamper efforts to import maize to mitigate food shortages in the country, says Oxfam country programme manager Ric Goodman.

Faced with rising food prices and dwindling supplies of basic commodities, the Zambian government announced last week that it would waive the 15 percent import duty on commercial maize to encourage traders to import the staple food.

"[The waiver] will allow the Millers Association of Zambia to buy 150,000 mt of maize from South Africa, and the Food Reserve Agency (FRA) to import 50,000 mt of maize," Enock Katowezhi, a spokesman for the ministry of agriculture told IRIN.

However, transporters have been affected by a fuel shortage caused by the closure of the country's only refinery, located at Ndola, roughly 400 km north of Lusaka, due to problems encountered during routine maintenace.

The 15 percent tax on imported maize had discouraged private-sector imports, thus limiting efforts to close the food gap, according to the US-funded Famine Early Warning Systems Network (FEWS NET).

Traders were unsure whether the government would scrap import duties on grain, and held off placing orders for maize in South Africa.

Now that the government has waived the import duty, traders are faced with prices up to 100 percent higher for white maize in South Africa than they were a few a months ago, as well as the logistical complications brought on by the fuel crisis in Zambia, Goodman pointed out.

"The decision to waive the import duty on commercial maize is a good thing, but it would have been a better decision had it been taken three months ago - government announced that it was considering lifting the import duty some time ago. If it had been more decisive then, and lifted the duty, traders could have brought in a quantity of food that would have had a moderating effect on the market," Goodman explained.

"But the private sector was unclear on government's direction and was therefore unwilling to import. Now the government has made that decision [to waive import duty], and that will help the market and stem rising maize prices, but it will have less of an effect at this stage," he commented.

Although traders could now place their orders, "it's going to take some time to get the food in place in Zambia".

"Zambia's acute fuel shortage, of both petrol and diesel, means that whatever fuel there is ... goes to Lusaka and to the mines and heavy industry first, and gets to the provincial centres last," Goodman said.

This would make it difficult to move food stocks to the areas in need, and could also impact on the extent to which imports ameliorated rising retail prices.

"The Southern, Western and Eastern provinces are hardest hit [by the food shortages]. The Southern and Western provinces will also be furthest away from the fuel supply, so people are double hit by food and fuel shortages," he noted.

Although the government gave the private sector the greenlight to import up to 200,000 MT of commercial maize, the effective production deficit is now estimated at 271,000 MT, according to FEWS NET.

Some 1.2 million Zambians, mainly in the south of the country, will need food aid through to March 2006 due to last season's poor harvest.

[ENDS]