BFAP building African market outlook

Changing conditions in world markets affect prices in Africa, but attempts to project future prices often fail to consider factors such as market structures, policy environment, weather-related supply shocks and regional trade flows.

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With its Baseline 2010 report the Bureau for Food and Agricultural Policy (BFAP) launched an initiative to produce an African outlook. This will take region-specific factors into account and seek to inform regional trade policy, private and public sector investment, and food-security initiatives within region’s agricultural sub-sectors.

Recent developments in the Southern African Development Community (SADC), in particular the formation of the SADC Free Trade Area, have underlined the importance of regionalisation of trade and regional markets, said the report. The BFAP said, from a South African point of view, it is important to “reflect and assess markets in the region for local planning decisions”.

Knowledge of the extent of deficit (or surplus) in regional markets will allow government and private players in the grain market to anticipate opportunities to manage grain stocks more effectively.

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Many SADC countries have no functioning legislation on genetically modified maize, which means that South African maize exports are likely to be subjected to stringent and sometimes arbitrary measures.

Another threat is South Africa’s incomplete land reform process that has caused increased uncertainty, decreasing investment and declines in commercial agriculture.