Zambian Seasonal Commodity Returns Swing with Rainfall Variations
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Rainfall shocks during the growing season affect seasonal commodity market returns - droughts increase likelihood of positive returns while ample rain causes negative returns.
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In Zambia, drought years like 2014/15 and 2018/19 saw positive seasonal maize market returns while good rainfall years like 2016/17 and 2020/21 saw negative returns.
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Negative returns occur when farmers anticipate upcoming ample harvests and release more of their own stocks, lowering lean season prices.
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Positive returns happen when drought causes farmers to withhold stocks for own use, reducing supply and increasing prices.
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Governments could mitigate food security impacts through strategic grain reserves while farmers should consider forward selling to reduce risk of negative returns.