High soybean prices in Zambia and Malawi are severely affecting poultry production costs, primarily due to market concentration and adverse climate conditions. The decline in soybean output creates affordability challenges, particularly impacting small-scale producers who rely heavily on competitive markets. Immediate regional cooperation and regulation are necessary to address these issues and ensure sustainable food production.
The rising prices of soybeans in Zambia and Malawi pose significant challenges for poultry production, a crucial source of protein in East and Southern Africa. Soybeans are essential in chicken feed, constituting a major portion of poultry production costs. The limited competition in the market exacerbates this issue, particularly impacting small-scale poultry producers who are heavily reliant on open market prices for feed.
Zambia and Malawi stand out as the leading soybean producers in the region; however, they faced substantial production declines due to climate stresses and market dynamics in 2024. Zambia experienced a significant 74% drop in soybean production due to adverse weather conditions and previous low pricing that deterred farmers from planting. Malawi’s production also declined, albeit less dramatically, yet soybean prices surged by 48%, creating an imbalance in affordability.
Our analysis at the African Market Observatory reveals that monopolistic practices and price influences from larger buyers are central to the rising soybean prices, further diminished by climate-induced production challenges. This market concentration directly affects the costs associated with poultry production, placing additional financial burdens on independent producers throughout the region.
The combination of drought and market dynamics has revealed vulnerabilities within the soybean supply chain. Poor rainfall and unfavorable pricing prompted farmers to greatly reduce planting, leading to lower overall production. Although smaller producers scrambled to compete, they struggled to maintain viable profit margins given escalating feed costs.
As consumer demand for poultry in sub-Saharan Africa is projected to rise significantly by 2050, it is imperative to maintain accessible feed prices. Independent poultry producers especially require a competitive market to sustain their operations. The currently thriving soybean industry faces challenges that necessitate immediate attention to foster resilience against climate change and to ensure economic viability.
Despite Malawi’s soaring soybean prices of nearly $900 per ton, it remains crucial to recognize that regional supply still meets local demand. The increase stems from competition concerns within a tightly controlled market structure. Conversely, Zambia has seen price stabilization due to imports and excess production capacity, underscoring the complexity of the regional soybean market.
The events of 2024 highlight the urgent need for coordinated regional efforts to address competition issues, essential for safeguarding food production and facilitating the participation of small-scale farmers. Ongoing inquiries into Zambia’s poultry market reflect the necessity for a comprehensive framework to monitor and regulate market behaviors that threaten agricultural productivity across borders.
In summary, the high soybean prices in Zambia and Malawi significantly impact poultry production costs, mainly due to the lack of market competition and adverse climate events. The decline in soybean production, coupled with price surges, places small-scale producers at a disadvantage, hindering their ability to sustain profitable operations. It is essential to implement regional strategies aimed at enhancing market competitiveness and resilience to ensure the stability of the poultry industry and food security in the region.
Original Source: theconversation.com
