The Impact of Tanzania-Malawi Trade Tensions on Poultry Industry

The recent decisions to ban maize imports into Malawi and subsequently ban soybean imports from Malawi into Tanzania appear to have been made swiftly, potentially overlooking the significant impact on poultry farmers in Tanzania.

The Tanzanian poultry industry, which is heavily dependent on soybeans for feed, faces a substantial challenge given the country's annual soybean demand of approximately 150,000 MT, a significant portion of which is typically met through imports. This timing is particularly critical, as it aligns with a period when the acquisition of ample soybean supplies is essential to sustain poultry production.

Soybean meal, recognized for its substantial protein content and superior amino acid profile, has become the dominant protein supplement in poultry diets. This is particularly relevant in Tanzania, where the industry has been transitioning from animal-based proteins like fish meal to plant-based alternatives such as soy.

This shift not only aligns with global trends towards sustainability but also reflects a response to the economic realities of feed production, where protein is often the most expensive component. The reliance on soybeans is not trivial; it represents a critical dietary element that influences the viability and profitability of the entire poultry industry.

What happened?

In the midst of challenging times, marked by a struggling economy and significant food shortages, Malawi's decision to stop maize imports from Tanzania and Kenya due to maize lethal necrosis comes to me shockingly. Shortly after, Tanzania responded with its own protective measure, banning soybean imports from Malawi to prevent the spread of another plant disease, the Tobacco Ringspot Virus.

These moves underscore the delicate balance between safeguarding national agricultural interests and navigating the complexities of regional trade relationships.

Current situation

Malawi plays a crucial role in Tanzania's soybean market, significantly influencing the availability and pricing of this key agricultural commodity. Tanzania, despite its growing soybean production, which increased from 8,100 MT in 2012 to 25,900 MT in 2022, still relies heavily on imports to meet its domestic demand.

In 2021, Tanzania imported soybeans from Malawi worth approximately USD 7.46 million. The following year, 2022, the total imports from Malawi amounted to USD 26.03 million, although this figure is not exclusively for soybeans but for all imported goods. Notably, 80% of Malawi's soybean exports in 2022 were to Tanzania, totaling USD 19.8 million.

This reliance is partly due to the expanding poultry industry, which consumes soybeans as a primary feed ingredient. The importation of soybeans, primarily from neighboring countries like Malawi and Zambia, has been vital in bridging the gap between local production and the burgeoning demand within Tanzania.

Impact on Tanzania poultry industry.

For small-scale poultry farmers, who often operate with narrow profit margins, any increase in feed costs can be particularly burdensome. A shortage of affordable soybean meal could lead to several potential impacts:

• Increased Production Costs: With the cost of soybean meal rising, the overall cost of poultry production is likely to increase, potentially making it less profitable for small-scale farmers.
• Search for Alternatives: Farmers may need to seek alternative protein sources, which might be less efficient or more expensive, further straining feed quality and their financial resources and reducing poultry growth and productivity.
• Impact on Livelihoods: Many small-scale farmers depend on poultry farming for their livelihood (55% of Tanzanians involved in agriculture approximately 33,957,616 people). Increased costs and reduced productivity can have significant implications for their income and economic stability.
• Market Dynamics: The shortage might lead to increased prices for poultry products, affecting market dynamics and potentially reducing consumer access to affordable poultry meat and eggs.
• Long-term Industry Growth: The poultry industry in Tanzania is essential to the country's livestock sector. Any disruption in the production of poultry, as a result of feed shortages and increased costs, could jeopardize the long-term growth and sustainability of the industry.

This situation underscores the vulnerabilities in the supply chain and the importance of strategic planning in agricultural policy.

To mitigate the potential negative impacts, a multifaceted approach by government and poultry producers involving diversifying import sources, increasing local soybean production is essential.

Through these actions and many others suggested by experts, Tanzania can not only address the immediate challenges but also strengthen the resilience and sustainability of its poultry industry in the long term.