Rising soybean prices in Zambia and Malawi threaten poultry production due to high feed costs, exacerbated by climate change and market concentration. Price competition issues lead to reduced production and increased costs for small-scale producers. A need for cooperative monitoring strategies is essential for improving poultry production resilience and ensuring fair prices.
The soaring soybean prices in Zambia and Malawi are expected to make chicken prices more expensive as these nations struggle with poultry production. Soybeans are a crucial component of chicken feed, thus significantly impacting food security in the East and Southern Africa region. Furthermore, the poultry feed constitutes 60% to 70% of the total poultry production costs, which exacerbates the situation for producers, particularly small-scale independent ones who purchase feed from the open market and are disadvantaged in price negotiations.
Zambia and Malawi are recognized as significant soybean producers within East and Southern Africa. However, both countries faced detrimental weather conditions in 2024, which were linked to climate change, along with market manipulation by processors and traders. Zambia experienced a drastic 74% reduction in soybean production due to adverse weather and previously agreed low pricing, while Malawi’s production fell by 20% but witnessed a 48% surge in soybean prices despite enough harvest for export.
The dynamics of the soybean market indicate that limited competition, particularly among dominant buyers, leads to unfavorable pricing for farmers. These dynamics, coupled with climate-induced weather challenges, have resulted in an unsustainable increase in soybean prices, leaving many small independent poultry producers operating at a loss due to high feed costs. The expected growth in poultry demand across sub-Saharan Africa necessitates a focus on affordable feed.
In recent years, Zambia’s soybean production peaked at 650,000 tonnes but plummeted to 170,000 tonnes in 2024 as farmers, influenced by low processing prices, opted to plant significantly less. Most farmers have limited storage capacities, compelling them to sell rapidly post-harvest, often to a few dominant processors. The situation highlights the power imbalance in trade terms, which adversely affects farmer livelihoods.
Following climatic impacts tied to El Niño, which disrupted agricultural patterns, resilience to such challenges must be improved through diversified agricultural practices and enhanced regional trade. In Malawi, soybean prices skyrocketed to nearly $900/tonne amid restricted exports, due to the lack of competition within the trading and processing market. Conversely, prices in Zambia stabilized due to imports and the depletion of stock from surplus crushing, despite earlier low purchase prices affecting farmer harvest volumes.
The recent soybean price trends indicate a pressing need to enhance competition monitoring strategies both regionally and nationally. While Zambia is currently undertaking an inquiry into its commercial poultry market, a regional cooperative approach is essential to strengthen poultry production resilience and promote fair pricing practices for small producers.
The challenges presented by high soybean prices in Zambia and Malawi pose a serious threat to poultry affordability and production. Climate change and market concentration issues exacerbate the difficulties encountered by small-scale poultry producers. To support the resilience of regional food markets and ensure fair competition, there is an urgent need for cooperative monitoring strategies across borders and enhanced market dynamics.
Original Source: theconversation.com
