Poultry remains one of the most affordable protein sources for the growing population in East and Southern Africa. However, the recent instability in soybean pricing and production has created significant challenges for poultry production in the region, particularly in Zambia and Malawi.
The Importance of Soybeans in Poultry Feed
Soybeans are a crucial ingredient in poultry feed, which constitutes 60%-70% of total poultry production costs. Price fluctuations in soybeans directly impact the affordability of poultry, particularly affecting small-scale independent farmers who rely on the open market for feed procurement. In contrast, larger producers control feed supply through integrated operations and influence soybean prices.
Decline in Soybean Production
Zambia and Malawi, the key soybean producers in East and Southern Africa, faced major production declines in 2024 due to climate-related challenges and market dynamics. Zambia’s production plummeted by 74%, primarily due to unfavorable rainfall and reduced soybean cultivation. This drop was also influenced by historically low soybean prices in 2023, which discouraged farmers from planting. Meanwhile, Malawi’s production declined by 20%, but the price surge of 48% between May and November 2024 far exceeded the decline in output.
Market Competition and Price Manipulation
Research by the African Market Observatory highlights competition issues as a key driver behind soybean price surges. In Zambia, dominant soybean buyers offered farmers prices well below the South African benchmark, leading to lower cultivation in 2024. Similarly, in Malawi, despite a 20% decline in production, soybean prices soared past Zambia’s, reaching nearly $900/tonne by the end of the year. This was fueled by a highly concentrated trading and processing market, rather than actual supply shortages.
The Impact on Poultry Production
Poultry demand in sub-Saharan Africa is expected to quadruple by 2050, increasing the need for affordable feed. However, high feed costs are already pushing small-scale poultry farmers into negative margins, as seen in Malawi since late 2021. The poultry sector’s competitiveness is at risk, further exacerbated by limited storage facilities that force farmers to sell their soybeans immediately after harvest at prices dictated by a few dominant buyers.
Zambia’s Soybean Market Stabilization
While Malawi continues to experience record-high soybean prices, Zambia has seen price stabilization due to soybean imports and surplus soymeal stocks from 2023. However, challenges remain, including power shortages that have hindered soybean crushing operations.
The Need for a Regional Approach
The events of 2024 highlight the urgent need for a regional approach to market regulation and competition monitoring. Zambia has launched an inquiry into commercial poultry market practices, but broader collaboration is necessary. Strengthening agricultural resilience through diversified production, improved trade policies, and market transparency will be essential to safeguarding food security and supporting poultry farmers in the region.
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