Columnists Features

Maintain soya prices


This marketing season we are expecting to have a ‘bumper’ harvest of soybeans, as my honourable politicians would like to put it. From my preliminary field assessment in the country, the crop looks promising if late fungal diseases will not set in, especially for the smallholder farmers. Basically, two things have led to this increase in production of the ‘green gold’; firstly, we need to give credit to the drive to have farmers diversify into other crops and practise crop rotation. Secondly, we have seen a jump in the number of farmers that adopted the use of inoculants on their seed. As agronomists and change agents, we need to congratulate ourselves for this enormous achievement. In a season which was very wet, one expects to see a crop that is generally deficient of nitrogen like has been the case with most maize fields due to leaching. This is one great advantage of inoculants, in that the bacteria which helps the plant fix nitrogen lives symbiotically in the plant roots, hence no amount of rainfall will cause leaching if inoculation was done effectively. Although smallholder farmers have adopted this technology, their yields will still be very low and on average we are looking at them getting 1.5 tonnes per hectare, if not less for those that just used inoculants. This, indeed, is not bad compared with what they normally used to get; that is around a ton. It is a jump of 500 kilos per hectare; what more when they start using fungicides for disease control and herbicides to manage the weeds?
However, this is a negative when it comes to pricing because the law of demand and supply sets in; prices normally slump. We as an industry can put in place measures to prevent discouraging the farmers producing less the subsequent season. We saw this with the cotton industry when farmers produced more than enough and the merchants pegged their prices lower than the previous season, and cotton production has never been the same again. This is retrogressive to the merchants because they had put up massive infrastructure to support this value chain. Most of them are now operating at below half their normal capacities. Although the regulations when it comes to those that supported the out-grower schemes were not effective as vultures set in to buy where they did not invest, especially our colleagues with ‘big eyes’.  I am made to believe the processors are there to operate as going concerns. Therefore, what I am pleading with them is that they should maintain last season’s prices, if not improve on them, despite the anticipated high supply.
We know they are in business, and normally in business, one wants to break even and have something to take care of their operating costs. A few points will suffice to compel them to maintain the prices.
Firstly, we know that the cost of electricity is likely to go up this year, and possibly that of fuel, which will add to increased operating costs. However, even if we have so much soybean produced this year, we will not see any reduction in the products that come from soybean such as cooking oil and animal feed. So, then, why is it that we always want the farmer to bear all the costs including those that are coming from our inefficiencies in the way we operate?
Besides, the cost of fertilisers, seed, chemicals and other inputs will remain as was the case last season, or even go up. I wouldn’t mind to see the cost of soya going up as well as that of cooking oil because nothing is reduced in this economy. As merchants, we can easily kill this industry if we only focus on eating today and forgetting what we shall eat tomorrow.
What we might need to do is to look at how we can make soyabean commodity differentiated. I know that even though Malawi and Zimbabwe might have adequate stocks for their use, countries like DR Congo and Mozambique may need our crop although Brazil might offload to Mozambique and Angola. We can take advantage of our usual customers; the Congolese.
We also have seen that the east African countries, apart from Tanzania, have had challenges with rainfall though they prefer getting their oil from the far east. However, we can still sell so much of our feed to those countries including our neighbour, Botswana. This value chain is one that I have been so happy about, because I have seen Zambia becoming self-sufficient in this commodity within a short period. Let us safeguard the success that we have achieved and avoid moving two steps forward, one step sideways and three steps backwards as has been the case with maize productivity. I will not talk about maize because we all know what the solutions are, but we just chose not to implement them. Good day Zambians and a job welo dani!
This author, Felix Tembo, is an agribusiness practitioner.

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