By BUUMBA CHIMBULU
There must be transparency in the management of maize exports in the 2017/18 farming season to bring about price stability which benefits both consumers and producers at a very low cost to the Treasury, the Indaba Agricultural Policy Research Institute (IAPRI) has said.
According to IAPRI, fostering a sustainable open border policy offered Zambia a financially inexpensive means of reducing the domestic price volatility of staple foods.
IAPRI explained that assuming that private traders would get assurances that there would be no restrictions to import or export maize when market conditions permit, then the imporwt parity price would become the upper price bound.
“Assuming that private traders will get assurances that there won’t be restrictions to import or export maize when market conditions permit, then the import parity price would become the upper price bound, while export parity sets a floor below which prices will not fall,
“If the process is transparently managed, it will bring about price stability which benefits both consumers and producers at a very low cost to the treasury,” said IAPRI.
This is according to the recently launched Maize Market Outlook and Regional Analysis 2017/18 report.
IAPRI also observed the need to fully embrace the use of Commodity Exchanges and Warehouse Receipts System (ZAMACE).
The institution said to fully operationalise ZAMACE, there was need for the Government to take a deliberate decision to purchase Strategic Grain Reserves (SGRs) requirements through the exchange.
IAPRI explained that this would fast track sustained capitalisation of the exchange as well as lower the cost of procuring and managing the SGR.
“Zambia should be commended for having made tremendous steps towards having a private sector-led commodity exchange by passing the Credits Act of 2010 and putting in place a statutory instrument empowering ZAMACE to oversee the setting up of the Warehouse Receipt System,” said IAPRI.