Category Archives: World Grain

KFMB – Kuwait’s milling giant

Already dominating its domestic market, KFMB is planning to expand its milling and baking capacities.

Few millers dominate their domestic market like Kuwait Flour Mills & Bakeries Company S.A.K.C. (KFMB). With massive port storage for imported cereals, nearly 3,000 tonnes of daily milling capacity, a chain of nine industrial bakeries and a range of processed products, the wholly state-owned company plays critical economic, social policy and food security roles in the oil-rich country of 4.4 million while generating $1.3 billion in annual sales revenues and net profit of $123 million in 2016.

Earlier this year, World Grain interviewed KFMB’s longtime top production executive, Abdulla Al Wahaibi. He spoke openly about the company, which employs nearly 4,000 and is the country’s lone wheat flour producer.

Milling in Kuwait got its start around the time of Kuwait’s independence from Britain in 1961 with majority private and minority government investment in a 120-tonne-per-day Simon Robinson mill with a silo.

Today, nearly all KFMB’s milling and grain storage operations are at a single 50,000-square-meter site on the Al Shuwaikh port in Kuwait City. The complex houses six milling lines totaling 2,850 tonnes of daily capacity. The two newest are 750 tonnes per day supplied by Ocrim in 2008 and Buhler in 2017. The latter sold its first milling equipment to Kuwait in 1972. A recently expanded feed mill can produce 500 tonnes per day of a wide range of animal feed products. KFMB has total storage capacity of 375,000 tonnes at the port in concrete elevators.

“This is the biggest grain storage at one single location in the Middle East,” observed Al Wahaibi, adding “there are three sections or complexes for wheat, yellow maize and barley. The tallest has a cell height of 59 meters.”

KFMB’s food security role hinges on the large stocks it holds. Sufficient wheat to meet four to six months of consumption is kept on hand as a strategic reserve, he noted. A two- to three-month supply of corn and barley for feed is maintained as well. USDA data show Kuwait’s wheat imports have been stable, averaging just under 500,000 tonnes annually over the last five years. The nation’s combined imports of barley and corn for feed have been as high as 800,000 tonnes per year, Al Wahaibi said.

Australia is the sole wheat source with the exception of about 50,000 to 60,000 tonnes of durum and CWRS normally imported from Canada for pasta and high protein bread. One swing mill is utilized for semolina. Corn and barley originate in Argentina, Australia and the Black Sea.

Panamax-sized vessels 225 meters in length first offload two or three holds at deeper Gulf ports before proceeding to Kuwait City at the Gulf’s northern end where the draft is only 9.6 meters, limiting the maximum wheat delivery to 46,000 tonnes. There is a single berth but 400 and 600-tonne per-hour ship unloaders permit offloading at 1,000 tonnes per hour and rapid vessel turnaround.

Flour

The bulk of flour production is for the main food staple, pita type Arabian flat bread weighing 50 to 75 grams each. KFMB’s own bakeries produce 4.5 million pieces per day. They are sold in packages of five at a fixed government price of just 50 to 75 fils (17¢ to 25¢).

Al Wahaibi estimates the sales price represents about 50% of the production cost. The Kuwaiti government provides a direct subsidy so that KFMB can carry out this social welfare policy and make a small profit as well. Over half of flour production is for pita bread.

KFMB operates a central bakery that consumes about 100 tonnes per day for production of European style rolls, buns and toast bread. McDonalds, KFC, Burger King, Pizza Hut and Subway are just a few of the numerous international fast-food restaurant chains in Kuwait that depend on KFMB to reliably supply standard baked foods or specialty flour to exacting specifications.

Around 15% of production is a highly refined white “patent” flour used for making cakes and pastries, Al Wahaibi said. KFMB can export about 60% of this nonsubsidized flour to other Gulf Cooperation Council (GCC) countries that form a tariff-free zone. Demand is highest in neighboring Saudi Arabia, especially during the period leading up to Ramadan.

Shipments of various flour types through Kuwait-based traders to Iraq have been climbing as well despite the financial and security challenges of dealing with the wartorn country. Basra, a major Iraqi city only 180 kilometers distant, is the main destination.

Al Wahaibi

Al Wahaibi attributes his company’s export success to “high quality wheat, top milling technology and strong quality control standards and efficient sales team.” The company grinds a wide assortment of flour types both for its own use, for small package retail sale in stores and for the hundreds of small private bakers in the country. Brown flour, white flour, biscuit flour, flatbread flour, whole wheat flour, barley bread flour, chappati flour and pastries and logaimat flour are all featured on the company’s website, in addition to crushed wheat and peeled wheat. The executive said KFMB may have the only bakery in the Middle East making glutenfree goods like toast bread, Al Wahaibi buns and rolls. He said such a product line stems more from KFMB’s social consciousness than a desire to add to its bottom line, since demand is limited and the cost of grinding alternatives to wheat is high.

Product is transported through stainless steel spouting at the KFMB mill in Kuwait. Photos courtesy of Buhler.

Another example of the company’s social responsibility is its early adoption of fortification of its flour and wheat-based products in line with GCC standards for iron, folic acid and other vitamins and minerals.

Though pita bread is the key staple food consumed by most households daily, KFMB still faces the management challenge of seasonal demand. Because of the extreme summer heat exceeding 45 degrees Celsius most days from May to September, Al Wahaibi explained, a good part of Kuwait’s population, including the heavy proportion of expatriates, leave the country for extended periods, necessitating a 40% to 50% reduction in output.

KFMB has devoted resources to build a well-recognized logo and “KFMB” brand name across its broad range of wheat-based retail products, including flour, pita bread, toast bread and buns, pasta and biscuits. Packaged cooking oil refined from imported soybean oil, corn oil and sunflower oil also carry the KFMB logo.

“We have been named one of the top 100 brands in the Middle East,” Al Wahaibi noted.

Feed

“In general, the strategic growth of the company will be in feed milling,” he said. “We will expand our current animal feed capacity from 500 tonnes per day to 1,500 tonnes per day and eventually to 3,000 tonnes.”

The company makes mixed feed from bran, corn and barley for sheep, goats, camels, cows and horses, according to government-approved formulas. It also sells yellow corn, wheat bran and other raw materials to the country’s large integrated poultry producers with their own feed mills.

Greater feed production capacity is needed to support livestock breeding at home.

Bühler sifters are part of the KFMB mill in Al Shuwaikh port in Kuwait City. The complex houses six milling lines totaling 2,850 tonnes of daily capacity.

“Our barley and corn imports will have to increase from the current levels” of 50,000 tonnes of barley – 20,000 tonnes respectively per month, he asserted.

Most sheep and goats consumed in the country are imported on the hoof by sea. Kuwait was the first country to import live sheep from Australia in converted automobile transport ships. Saudi Arabia has followed suit. Most of the imported animals are fattened and slaughtered leading up to the Muslim feast holidays.

A more humane but probably less economical approach would be to raise the animals locally. However, Kuwait has limited grazing during its short and intermittently rainy winters. More feed production is needed. In addition to the subsidized fuel, electricity, water and flour available to all consumers, the state provides ration cards to its citizens. They make up only 30% to 40% of the total population due to the large number of immigrant workers.

Kuwait imports live sheep from Australia that are sold locally for $160 to $180. Kuwaitis get monthly ration cards that contain rice, cooking oil, skim powdered milk, pulses and frozen chicken at a subsidized price.

Future

Feed production is an opportunity, but the No. 1 task of KFMB is to continue to expand milling and baking capacity to satisfy the needs of a still growing population, Al Wahaibi said. More bakeries will be launched. The company is looking to add 20,000 to 30,000 square meters of land adjacent to its site to make room for new plant operations. Other challenges include mechanization and automation of production processes in part to reduce dependency on expatriate workers. For every Kuwaiti employee of KFMB there are 20 non-Kuwaitis. The largest contingent come from Egypt followed by India, Bangladesh, Sri Lanka and the Philippines.

History

KFMB has a colorful history resulting in part from its proximity to Iraq. The company converted to 100% government ownership in 1987. The next year Kuwait Bakeries Company was merged into it. Sadam Hussein’s conquest and annexation of Kuwait as Iraq’s 19th province was just two years later in August 1990. During the seven months of occupation an Iraqi manager was appointed to run the company, the wheat stores were emptied, and much flour production was diverted northwards as well. Before it could be put into production, a recently commissioned vegetable oil refinery was dismantled and shipped to a city in northern Iraq never to be returned.

Following the Iraq War of 2003, the UN World Food Programme contracted with KFMB to store and supply wheat and produce flour and other products for humanitarian distribution in Iraq.

Since then with KFMB as a national anchor of food security, Kuwait has continued to be a stabilizing force in the region.

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South Asia’s feed industry growing

The Indian subcontinent long has been one of the world’s most undernourished regions in terms of caloric intake and consumption of animal proteins.

Poverty has not been the sole reason for the latter deficiency. Religion and culture also have played a role.

Over the last 10 years rapid economic development and greater dietary acceptance of meat, particularly poultry, as well as eggs and fish have resulted in sustained high rates of growth in feed processing and in production and trade of maize, soybeans and other coarse grains and oilseeds.

With a combined population of 1.6 billion people, the major countries of South Asia — India, Pakistan, Bangladesh — as well as smaller ones like Nepal and Sri Lanka all have seen average growth rates of 8% to 10% in compound feed production due to dynamic investment in modern feed and livestock operations.

Greater planting and increased yields of maize, most of it for feed use, has resulted in a near doubling of production in just a decade, prolonging the region’s decades-old green revolution.

South Asia’s surge in maize and feed production is examined nation by nation in the survey that follows.
(Data sources: Alltech 2015 Global Feed Survey, USDA, and World Factbook)

Nepal’s first steel grain silos were supplied to Probiotech’s feed and
soybean processing operation about 10 years ago by Scafco Corporation.

India

Population: 1.27 billion

Maize production: 24 million tonnes

Feed production: 29 million tonnes

The world’s second most populous country now ranks fifth globally in maize production, sixth in soybeans (10.5 million tonnes), fifth in feed, third in eggs (84 billion pieces), and fourth in chicken meat (4.5 million tonnes), per USDA data.

Nevertheless, India’s meat and egg consumption on a per-person basis is just a small fraction of that of China or the U.S., with the first and third most people. Thus a long period of sustained growth in the feed and livestock sectors may be anticipated.

A 2015 Rabobank survey projected 8% annual growth in Indian compound feed production for the next five years, slightly higher than expected GDP increases.

Maize production nearly doubled in the period from 2004 to 2014, but production has leveled off since then partly due to a sharp decline in exports to Southeast Asia as international prices fell. The potential for further production increases is still enormous as domestic demand for feed and starch production continues to rise.

Maize yields, though increasing, are still just 2.5 tonnes per hectare, less than half the world average of 5.5 tonnes per hectare. In some top producing states like Andhra Pradesh, where the use of single cross hybrid seed is widespread, yields have nearly caught up to the global average.

Maize is a pan-India crop with production exceeding 1 million tonnes in at least eight states. The two southern states of Karnataka and Andhra Pradesh make up nearly 40% of production. Maize is grown year round but the rainy summer kharif season, dominated by the southwest monsoon, accounts for 70% to 80% of annual plantings.

The government has introduced a minimum support price for maize to help stimulate output, particularly during the dry winter rabi season, helping to even out availability throughout the year.

The city of Gulab Bagh in the northern state of Bihar, with a large rabi harvest, is the site of the country’s largest delivery center and market auction place (“mandi”) for maize with up to 2,000 trucks arriving daily and maize accounting for the bulk of the 2 million tonnes of cereals and legumes traded there annually. Much of India’s maize exports to neighboring countries, including nearby Nepal, are purchased at this mandi.

The Compound Livestock Feed Manufacturers Association of India (CLFMA) reports 233 members comprising a rapidly expanding formal sector. CLFMA estimates the value of feed production at $15 billion. Broiler, layer and dairy made up 38%, 32% and 26%, respectively, of the production per the Alltech Feed survey. However, CLFMA reports that compound feed accounted for only 50% of poultry and 10% of total cattle feed and aquafeed requirements in India.

David McKee, far right, visits a grain trader near Birgunj, Nepal.

Domestic soybean meal consumption has increased to about 5 million tonnes per year, up 50% from the first years of this decade. As a result, India may soon lose its status as an exporter of soybean meal and become instead a major net soy complex importer. During the three years from 2010 to 2012, soybean meal exports made up 59% of total average production of 7.7 million tonnes per year, but exports fell to only 17% of total production from 2014 to 2016.

International players are stepping up their presence in oilseed processing. In May 2016, Adani Wilmar, a joint venture between Asia’s largest agribusiness group Wilmar International and India logistics giant Adani, acquired a two-thirds share in Ruchi Soya, India’s biggest soybean processing company. Adani Wilmar already had eight seed crushing units across India with daily capacity of 7,400 tonnes.

By value, milk is by far India’s most important agricultural commodity and India is the world’s top producer. As breeds with better genetics replace traditional cows with low milk yields, the adoption of compound feed for dairy cattle may be expected to increase at an even quicker pace. India’s enormous wheat and rice milling sectors, processing a combined 150 million to 200 million tonnes per year, are a major source of bran and other byproducts for all types of feed, but particularly for cattle.

Pakistan

Population: 202 million

Maize production: 5.2 million tonnes

Feed production: 6.2 million tonnes

Pakistan’s feed and livestock enterprises constitute the country’s most technically advanced and competitive agribusiness sector, according to many observers. The feed millers association counts over 150 producers of pelleted feed, supplying over 70% of total broiler feed requirement. Poultry production has been almost fully transformed from a backyard to commercial activity in the last couple of decades.

Government market intervention in the corn sector is minimal aside from 40% import tariffs. Production, which is almost exclusively for feed and starch use, has risen two-thirds from 3.1 million tonnes in 2006 to 5.2 million tonnes in 2016, according to USDA data with less than 10% increase in planted area. The high domestic prices boosted by tariffs have stimulated increased spending on inputs. International seed companies are well established in Pakistan. High yielding varieties and hybrids now make up 40% of the planted area and 70% of overall production, according to the most recent USDA report. In the Punjab region, two maize crops are harvested annually and 65% of overall production benefits from irrigation.

The country imported 1.7 million tonnes of soybeans and 700,000 tonnes of soybean meal in 2016 to make up for the short domestic supply of vegetable proteins. Soybean imports were almost nil up to 2014 when the government imposed import tariffs, now fixed at 21%, to support local crushers. Soybean meal imports have fallen by a third since the peak of 1 million tonnes in 2013, but total soy complex imports are still 2.5 times higher than just three years ago.

Prior to the recent surge in soy imports, cottonseed meal had been the main source of vegetable protein, but its production has declined 22% to 1.4 million tonnes since peaking at 1.86 million tonnes in 2014.

Though the predominantly Muslim country faces none of the cultural taboos that prohibit beef consumption in its giant neighbor, broiler meat still dominates as a meat source. A USDA report said that feed conversion rations for broilers have improved from 2.2 kg to 1.6 feed per kg live weight since the early 2000s. About two-thirds of maize production goes to poultry feed. Wet milling for starch production uses up most of the remainder of the crop.

Bangladesh

Population: 156 million

Maize production and imports: 1 million tonnes (author’s estimate)

Feed production: 3.1 million tonnes

The most densely populated large country in the world with about 1,000 people per square kilometer, Bangladesh has made tremendous strides in the last 10 to 20 years not just toward self-sufficiency in rice production, the source of over 70% of caloric intake, but also increasing dietary protein.

Fried chicken outlets like Kentucky Fried Chicken as well as a half-dozen copycats (BFC – Best Fried Chicken, CFC – California Fried Chicken) are ubiquitous in the crowded megalopolis Dhaka.

The poultry sector has several large operators with hundreds of thousands of layers and broilers. Many are integrated with feed milling. The country’s largest agribusiness companies like Meghna Group and City Group are active in soybean crushing. Soy complex imports consisting of beans (1.2 million tonnes) and meal (300,000 tonnes) have tripled since 2006.

Domestic maize production is small but increasingly substituted for the second rice crop in some areas. Most maize comes from nearby Bihar state, one of northern India’s largest producers, in unofficial cross border trade.

Byproducts from 34 million tonnes of milled rice production in Bangladesh constitute a major starch component for poultry feed. In addition to rice bran, automated rice mills in Bangladesh may generate up to 2 million tonnes of rice flour available for poultry feed by grinding off 15% of the endosperm to make so-called miniket, a milled rice category that appears longer and finer and commands a premium price.

Nepal

Population: 29 million

Maize production: 2 million tonnes

Feed production: 750,000 tonnes

The explosion of compound poultry feed production in Nepal in recent years is a case study of economic development improving diets.

Probiotech's food processing complex in Birgunj, Nepal, includes the country's first large compound feed mill.

A dozen years ago there was a single producer of pelleted poultry feed in the country. Today there are said to be over 50 such companies, 20 of which have capacity of 10 tonnes per hour or more, though Nepal’s per capita GDP is still smaller than any of India’s 29 states and territories and its population is less than 15 of those states.

Nepal is mainly a Hindu and Buddhist country. Thus eggs, broilers, and, to a lesser extent, fish, have been the major drivers of increased animal protein consumption.

But this dietary change has been learned behavior transcending just a generation. Mr. Keshab Bikram Khadka, the proprietor of one of Nepal’s largest feed milling companies, Shree Daonne, in the border city of Bhairahwa, is well known under the name Swami Tathagat for his campaign spanning 30 years to teach Nepalese how to cook chicken meat.

Most feed milling is clustered in three large cities on the border, with India on Nepal’s southern lowland plain called Terai, an irrigated zone extending from the northern Ganges plain. Up to two-thirds of maize used in feed milling is imported from India mainly due to quality considerations. The bulk of poultry production is in the Chitwan valley halfway between the Terai plain and the heavily populated Kathmandu valley to the north.

There are at least two soybean crushers. The largest, Probiotech, which was also the original producer of pelleted feed, recently upgraded its plant with dehulling equipment in order to produce the country’s first high protein soybean meal.

Nepal’s grain logistical infrastructure also is improving. There are at least five feed milling companies with steel silos for storage of maize.

Sri Lanka

Population: 22 million

Maize production and imports: 500,000 tonnes (author’s estimate)

Feed production: 770,000 tonnes

At 35 kg per capita, Sri Lanka has the highest rate of compound feed production per capita of any South Asian country. Soybean meal imports reached a record 230,000 tonnes in 2016, twice the level of 10 years ago. Bran from 3 million tonnes of milled rice production and 1 million tonnes of annual wheat imports is available as a feed component.

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Maize Production soaring in eastern Africa

Maize is by far the most important cereal crop in the four largest countries of eastern Africa. Combined production of 17.2 million tonnes in 2016, despite ongoing drought, is nearly 50% more than a decade ago. Remove middle-income Kenya, which had a 14% decline, and the increase for Ethiopia, Tanzania and Uganda was nearly 70% versus population growth since 2006 of 27%.

Having increased output, one of the next major challenges is to reduce the high levels of cancer-causing aflatoxins in the region’s maize. A presentation at the 2015 International Association of Operative Millers Conference in Nairobi cited recent studies showing average ppms in the region far above international norms. Along with food safety, the dominance of smallholder farmers, government market intervention, regional trade and food security are all key aspects of the maize economy in eastern Africa as examined country by country in the survey that follows.

Foreign direct investment has brought large-scale mechanization to maize production in Uganda, helping to raise average yields. Photos by David McKee

Ethiopia

Population: 99.5 million
Production: 6.3 million tonnes

Ethiopians have cultivated cereals for thousands of years on the high plateau where their ancient civilization originated. Production of the New World grain overtook sorghum for good in 1982 to become the No. 1 cereal crop. Maize now makes up 30% of 2016 major grains production of 21 million tonnes. Due to severe drought, that figure was down 4.5 million tonnes from a record 25 million tonnes two years before. Nevertheless, 2016 maize production recovered to within 5% of 2014’s level.

Small hammermills process most maize even for urban consumption in Addis Ababa. Industrial roller milling of maize has yet to take hold.

The USDA estimates that nearly 10% of maize has been used for feed since 2011 as living standards rise.

Despite drought, the food security outlook is positive with ending stocks of maize at 450,000 tonnes. Domestic maize is one of the three main cereals held by the government in its strategic grain reserve, along with domestic sorghum and mostly imported wheat.

A state entity has operated a fertilizer importation and distribution network for many years that has helped boost average yields to around 3 tonnes per hectare even though smallholders account for 95% of production. Large investments in improved seed systems supported by the country’s donor-funded, semi-autonomous Agricultural Transformation Agency also have contributed to increased output.

Tanzania

Population: 51 million
Production: 5.5 million tonnes

Thanks to rising production with a current five-year average of 5.7 million tonnes, Tanzania has become a major exporter to deficit countries in the region. Since 2013, annual exports have been around 400,000 tonnes versus just 14,000 tonnes in the decade of the 2000s. Maize exports are a mixture of cross-border trade, deals by large trading houses, and sales from the government reserve in order to rotate stocks without disrupting domestic markets.

Maize is stored temporarily in long cribs at Amatheon Agri’s 3,000-hectare farm in northwestern Uganda.

Tanzania’s National Food Reserve Agency (NFRA) plays a large intervention role, buying up much of the commercial surplus from smallholders at a guaranteed floor price. The country’s maize ending stocks have been around 1.3 million tonnes since 2013 thanks to NFRA, which may be termed a success to the extent that for over a decade the country has not needed to appeal to international donors for food aid due to drought or other emergencies. To the contrary, organizations like the United Nations World Food Programme (WFP) sometimes rely on purchases from NFRA to supply its own food distribution programs in the region.

Small hammermills grind almost all maize consumed. Popular markets in Dar es Salaam house large numbers of locally fabricated hammermills that provide a fee-based service. Tanzanians have yet to acquire a taste for the highly refined, degermed maize meal produced by industrial roller mills elsewhere in the region.

Large maize surpluses have contributed to the leveling out of wheat imports in Tanzania to an average of 850,000 tonnes per year since 2012 following many years of increases.

Kenya

Population: 45.9 million
Production: 2.8 million tonnes

As a result of a sustained period of GDP growth, Kenya now has the highest average income of any country in the region. This is reflected in more diversified diets and a plateauing in total maize use since 2011 at around 3.7 million tonnes per year despite continued population growth. USDA estimates that 10% of the country’s maize is now going for feed use. By some measures Kenya is already considered to be a middle-income country. Rapid increases in egg and broiler production are evidence of that.

Flat consumption belies a major shift in the maize economy. Since 2012 area planted in maize has decreased by one-third while imports have quadrupled to 1 million tonnes per year. Almost all of the incoming maize originates in Tanzania and Uganda, fellow members of the East African Community (EAC) customs union. Better rainfall gives the two countries a comparative advantage in maize production vis-a-vis drought-prone Kenya.

The national grain reserve agency, Kenya National Produce and Cereals Board (NPCB), has artificially boosted production by buying a few hundred thousand tonnes per year from farmers at an average price of $30 per 90-kg bag ($333 per tonne). In June 2016 it lowered its purchase price 20% to $266 per tonne after continued lobbying from millers who sometimes depend on supply from tender sales of government stocks. Inferior quality of poorly stored government grain is an ongoing problem. When finally rotated, much of NPCB’s maize is only suitable for feed use.

Unlike in neighboring Tanzania, large industrial roller mills process most maize consumed in Kenya, at least by the urban population.

Uganda

Population: 37.1 million
Production: 2.6 million tonnes

Maize along with cassava, other root crops, plantains and beans is one of the main food staples in Uganda. Nevertheless, due to relatively high average yields of 2.5 tonnes per hectare, the country produces nearly as much as Kenya where yields are just 1.7 tonnes. Uganda exports around 300,000 tonnes to its neighbors both as maize meal and grain. South Sudan’s burgeoning urban population is particularly dependent on Ugandan maize surpluses. WFP operates a regional hub in Uganda that procures maize grains and meal within the country to supply the domestic refugee population as well as displaced populations and refugees across the borders. Feed use of maize is already 200,000 tonnes per USDA estimates, as poultry production expands.

A liberal business climate has enabled Uganda to attract significant foreign investment in agribusiness. With little government intervention to muddle cereals markets, the maize value chain also has received its share of incoming funds.

South African grain management company Afgri has established a foothold with storage facilities in a number of locations, including Gulu in the northwest. Several commercial maize farms have started up in recent years. Berlin-based agribusiness Amatheon Agri Holding NV operates one of the largest with about 2,000 hectares planted to maize on a total of 3,200 hectares of cultivated land in the northwest as well.

North and South Kivu, DRC

Population: 12 million
Production: 800,000 tonnes

DRC’s heavily populated, mineral-rich provinces of North and South Kivu are more economically integrated with other countries of the Great Lakes Region than with the rest of DRC. The large urban populations of Goma, Bukavu and Uvira benefit from imports, mostly smuggled and untaxed, of all kinds of foods, including maize and maize meal.

One bold investor has started up the region’s first modern maize roller mill in Ruzizi Plain, north of Lake Tanganyika. The electrical hook-up is from nearby Burundi. Urban consumers are pleased to buy a Congolese brand.

Government data just for South Kivu in 2013 shows 337,127 tonnes of production by 835,472 households with 135,858 tonnes commercialized, all increases from the previous year. North Kivu’s figures are 10% to 20% higher. By comparison, almost 1 million households produced over 6 million tonnes of cassava in South Kivu. Due to steady, year-round rainfall exceeding 1,500 ml, but much more at higher elevations, the potential to increase maize production in the western plateau regions of South Kivu would be enormous if only feeder roads could be built and security improved. A decades-long presence of roaming militias has displaced much of the rural population to cities along the lake-shores, leaving large tracts of arable land available for cultivation.

Rwanda

Population: 12.7 million
Production: 550,000 tonnes

Rwanda’s dirigiste government has systematically targeted production of maize, a non-traditional food, as a means of enhancing food security. The result has been a ten-fold increase in production from just 50,000 tonnes in 2000 on a hilly landscape. The Rwandan state’s strategic grain reserve maintains a relatively modest maximum level of 50,000 tonnes of stocks but has even reduced it in recent years and sold off silo and warehouse storages, judging that the country faces no major food security challenges warranting the cost of maintaining a large reserve. International companies like Afgri have invested in some of these storage facilities and put them to commercial use. There are a handful of small industrial maize roller mills around the country, some of which import maize and then reexport maize meal to neighboring countries like DRC and Burundi. A commercial poultry industry is developing, creating additional demand for maize in feed.

South Sudan

Population: 11.9 million
Production: 400,000 tonnes

The economy of conflict-torn South Sudan, the world’s youngest country, depends on petroleum exports, subsistence farming and international aid. A joint WFP/FAO assessment in 2015 estimated 1.27 million tonnes of gross cereals production in two annual crops on 1 million hectares. Precise data are lacking but the breakdown is roughly two-thirds white sorghum and one-third white maize. There are just a small number of semi-mechanized commercial farms in the north bordering Sudan. The UN report put the net cereals deficit in 2015 at 250,000 tonnes. Traders bring sorghum from Sudan and white maize from Uganda to fill this gap. However, since fighting between government factions erupted in December 2013, food aid has again become a major part of the food balance sheet. The WFP said the country has 1.7 million displaced persons in addition to 650,000 refugees mainly in Uganda receiving emergency handouts. Non-emergency programs like school lunches bring the total number of beneficiaries to 3 million, about a quarter of the population. Thanks to its commercial availability in the region, maize makes up the biggest part of the donated food basket.

Burundi

Population: 10.7 million
Production: 150,000 tonnes

Conflict-ridden Burundi, similar in area, population, geography and agricultural practices to its neighbor Rwanda, stands in stark contrast when it comes to maize production. In 1972, when it had a centrally planned socialist economy, the country attained a peak of 250,000 tonnes, two-thirds higher than current levels.

Imported maize is part of the food aid basket provided to people displaced by the recent fighting and political instability.

Somalia/Djibouti/Eritrea

Population: 10.6 million/826,000/6.5 million
Production: 116,000 tonnes/0/20,000 tonnes

The three arid countries along the Red Sea and Gulf of Aden coastlines extending to the Horn of Africa produce and consume little maize. Somalis are traditionally nomadic herders and traders. The same is true for the ethnically Somali people of Djibouti. Their modern carbohydrate preference is imported rice and pasta. Somalia’s maize planting on 200,000 hectares yields not much more than a half tonne per hectare. Some maize is grown on Eritrea’s high plateau region but teff and sorghum are the main cereal crops.

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Drought impacting maize output in southern Africa

In all but a couple of countries of southern Africa, maize (corn) is the main food staple and dominant cereal crop. With the exception of South Africa, smallholders on non-irrigated land account for most production. Thus, the unprecedented drought afflicting the region the past two years has had a severe impact on food security.

How dependent is each country on maize and how are they coping? Below a nation-by-nation survey, using data from the CIA Factbook and U.S. Department of Agriculture, begins with the region’s economic and agribusiness giant.

South Africa

Population: 53.7 million
2016 production: 13 million tonnes

In a normal year South Africa’s maize crop is from 12 to 14 million tonnes, sufficient for domestic needs with up to 3.5 million tonnes remaining for exports and carryover stocks. USDA estimates a strong recovery to 13 million tonnes in the 2016 crop mainly harvested from late May to mid-July, after 2015 output had shrunk to just 6.5 million tonnes, requiring around 3 million tonnes of imports.

Mpongwe Milling, a subsidiary of Agrivision, is one of the largest corn meal producers in Zambia’s copperbelt. White maize storage is in grain bins supplied over a number of years by SCAFCO USA. Photo by David McKee.

A highly developed port, rail and road transportation system and storage infrastructure for cereals ensures minimum bottlenecks for cereals importation or exportation in most years.

Three or four major food companies each dominate maize and feed milling, respectively, and freely buy from world markets. There are no government grain holdings or market intervention.

Currently the crop consists of about 60% white maize primarily for human consumption and 40% yellow corn used in animal feed. Surplus white maize not needed for maize meal goes for feed use.

Jacques Pienaar, publisher of the grain newsletter Commodity Insights Africa, Johannesburg, forecasts yellow corn production for feed will grow the most as the expanding middle class increases meat consumption. Within 5 to 10 years yellow maize is likely to be 60% of the total crop, he said.

About 90% of South Africa’s corn crop is genetically modified (GM). This sometimes complicates its ability to fill the deficits of several countries in Africa that ban GM cereals. Less than 5% of the crop is self-consumed by farmers.

Zambia

Population: 15.1 million
2016 production: 2.9 million tonnes

Within the last 10 years land-locked Zambia has developed into a second regional corn belt, supplying nearly 1 million tonnes of maize to its neighbors. These exports come at a cost to the national budget that could exceed $100 million since the Ministry of Agriculture subsidizes fertilizer, seed and other inputs while the National Food Reserve Agency (FRA) relies on a network of 600 depots to buy an official target of 500,000 tonnes, but usually more, from smallholders at a guaranteed price after the harvest beginning in April.

During the lean season from November to April, when farmer’s stocks have been exhausted, FRA provides fixed monthly allocations to about 90 industrial mills based on their roller capacity. Since the government pays the cost of storage and transport from surplus to deficit zones, the private sector millers have learned to live with this system that guarantees a certain level of profitability even for inefficient mills. The mills do compete to buy maize on the open market after harvest in order to operate the other six months.

Smallholders account for about 95% of maize production which is almost all non-GMO white maize. Given the heavy government support for smallholders, commercial farmers avoid maize production in favor of more market-based crops under pivot irrigation like wheat, barley and soybeans.

By the end of 2016 the country expects to launch a grain commodities exchange in Lusaka called Zamace. Delivery points will be in the major grain zones with a network of storages issuing negotiable warehouse receipts. Futures contracts will be possible via an arrangement with SAFEX, South Africa’s futures exchange, which is part of the Johannesburg Stock Exchange.

Private grain traders, who are largely shut out of maize markets due to the heavy-handed role of the government, hope that FRA will transfer some of its activity to Zamace to allow for transparent price discovery and operational efficiency.

Taxpayer subsidized maize has also contributed to the rapid growth of Zambia’s poultry sector over the last decade. Up to 300,000 tonnes of white maize is used in feed, though the 2015 commodities crash and a devaluation of the kwacha have precipitated a contraction in egg and broiler demand, reducing feed use.

Malawi

Population: 18 million
2016 production: 2.2 million tonnes

With annual per-capita consumption around 130 kg, Malawi is one of the world’s most maize-dependent countries. Two consecutive years of crop failure drove 2015 and 2016 production down 27% and 21%, respectively, to the lowest in over a decade after a record harvest of 3.9 million tonnes in 2014, per USDA data. The average maize crop since 2009 had been over 3.6 million tonnes and the country had become an exporter of 300,000 tonnes per year from 2007 to 2012. The rainfall shortage has been most severe in the densely populated southern part of the country where farm sizes average only a fraction of a hectare and most farmers cannot grow enough for their own needs.

A commodity exchange, warehouse receipts financing, and market information systems have contributed to the increasing commercialization of the key crop.

On the other hand, a para-statal grain marketing board called ADMARC intervenes in markets to buy at high prices in remote areas and sell at below cost to the poorest population groups, sometimes distorting markets in the process. State grain reserve stocks were depleted during the first year of drought. Since then, high-level negotiations have taken place with Zambia’s government to acquire additional supply from its betterstocked reserve.

In the meantime, international food aid is once again becoming a variable in the food balance equation even after the country had been mostly weaned from such support during the years of record harvests up to 2014.

Angola

Population: 19.6 million
2016 production: 1.4 million tonnes

Maize output is forecast to fall 25% in 2016 after reaching a record 1.9 million tonnes in 2015. Imports are only 50,000 tonnes. Like South Africa and unlike most other countries in the region, large commercial farms, many with pivot irrigation, account for the lion’s share of production. Timely completion of road and rail infrastructure for inland corridors before the oil price bust means that maize and other commodities can be efficiently moved from the central highlands to the population centers on the coast.

USDA estimates over 20% of maize, or about 300,000 tonnes, goes to feed use. For Africa, this is a relatively high share and testifies to the rapid development of a modern poultry sector, thanks in large part to state subsidies.

Mozambique

Population: 24.7 million
2016 production: 1 million

The 2,000-km long country presents a variegated picture when it comes to maize. The cereal competes mainly with imported rice as a daily staple in urban areas and with cassava in rural areas. Industrial roller mills belonging to major food companies in Maputo grind high quality maize imported from South Africa. The handful of commercial millers in the central Beira-Chimoio corridor and the Nacala-Nampula corridor in the north rely on domestic maize grown by smallholders and manage to place only limited amounts of their product on supermarket shelves of the capital.

Commercial farmers launched maize growing with pivot irrigation in the 2000s but gave up when low prices of smallholders in the bush with minimal input costs prevented the modern operations from covering their heavy input and energy costs, let alone servicing debt and amortizing equipment.

Some large maize millers have set up hundreds of buying stations in the bush to compete with poultry producers and traders to obtain sufficient supply. Smallholders have benefited, but El Niño-induced drought has contributed to a 50% reduction in the harvest since the peak in 2011.

Katanga province, DRC

Population: 11 million (2012 census)
Production: 577,000 tonnes (2012-13)

The urbanized, industrialized southern part of Democratic Republic of Congo’s richest province, which is about the size of Spain, mostly relies on Zambia for inexpensive, subsidized maize meal despite major local investment in some modern mills and commercial maize production. In Zambia’s neighboring copperbelt, industrial maize mills have the installed capacity to qualify for sufficient government allocations to supply the Katanga market. Foot and bicycle traders transport thousands of 25-kg bags of untaxed maize meal daily on bush paths across the border for transport just 100 km to Lubumbashi, the country’s second largest city. Katanga’s government requires each copper mining company to plant at least 500 hectares of maize, but provides none of the incentives that Zambia does for its farmers. The mining companies have their maize custom-milled and distribute the meal to their employees.

About three quarters of domestic Katanga maize production of 600,000 tonnes is in the less populated, rainier, remote northern part of the province. The surplus goes to meet demand further in the heart of the vast Congo River Basin.

Madagascar

Population: 23.8 million
2016 production: 450,000 tonnes

The world’s fourth largest island has significant maize production only in its drier, cooler southern third. Rice dominates everywhere else. Smallholders getting an average yield of just 1.5 tonnes per hectare account for almost the entire output. Imports and exports are negligible. The potential to grow much larger quantities is there. A decade ago a South Korean company’s scheme to grab 2 million hectares of land primarily for export maize production led to massive protests and the fall of the government.

Zimbabwe

Population: 14.2 million
2016 production: 350,000 tonnes

The country, which lies at the epicenter of the El Niño-induced drought, had managed a 1.5-million-tonne maize harvest in 2014, the highest in over 10 years, but has seen output plummet 77% since then. Throughout the 1980s and 1990s, Zimbabwe was a regional maize basket, producing 1.5 to 3 million tonnes most years and exporting several hundred thousand tonnes in some.

Following President Mugabe’s dispossession of white farmers in the early 2000s, all agricultural production plunged. This year’s drought-afflicted crop will leave a deficit of several hundred thousand tonnes based on current demand of 1.5 million tonnes of white maize. In most years Zambia is able to make up Zimbabwe’s shortage of non-GMO white maize, often through governmentto-government trade, but Zambia has been banning exports in an effort to limit domestic food price inflation. Globally, the supply of surplus white maize, limited to Mexico and the U.S., is too small to meet Zimbabwe’s demand, even if it accepted GM corn.

Despite a severe liquidity crisis, wheat imports will have to substitute for maize. The last two years they have reached a record 350,000 tonnes. But this does not make up the total food deficit. As so often happens in Africa, drought means that the most vulnerable simply eat less.

Swaziland, Namibia, Lesotho, Botswana

Population: 7.8 million
2016 production: 102,000 tonnes

This quartet composed of two mountainous enclaves and two largely empty desert and semi-arid states are well integrated into South Africa’s maize markets. They have little production themselves aside from 50,000 tonnes in Swaziland and 30,000 tonnes in Namibia versus 75,000 tonnes and 150,000 tonnes of imports for the pair. Botswana and Lesotho import 150,000 and 75,000 tonnes of maize and maize flour. A handful of mills process grain bought from South Africa even when that country must import from overseas.

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