State produce trader Agricultural Development and Marketing Corporation (Admarc) is yet to start buying maize on the market amid escalating prices of the grain.
But grain traders are already on ground buying the staple grain at K250 per kilogramme (kg), K30 above the government set minimum price of K220 per kg.
Agriculture experts fear that by the time Admarc will be entering the market, prices would have escalated further, affecting its maize purchase budget of K12 billion.
In a brief interview on Tuesday, Admarc general manager Rhino Chiphiko could not commit as to when the firm will start buying maize, saying they are waiting for the grain to dry to the recommended moisture content of 14 percent or below.
“We have not started purchasing maize because we are wating for it to dry. Now, the moisture content is at 20 percent,” he said.
Chiphiko was also non-committal on how much maize Admarc is expected to buy, saying “we don’t have the figures now”.
In the 2022/23 National Budget, Treasury allocated K12 billion to split by National Food Reserve Agency and Admarc to replenish the strategic grain reserves.
Maize prices have continued to escalate contrary to the usual pattern of falling prices in anticipation of the harvest.
International Food Policy Research Institute Monthly Maize Market Report for April 2022 shows that maize prices rose by an average of 13 percent in April, with the highest increase recorded in Mwanza at 26 percent to K240 per kg in April from K180 per kg the previous month.
In an interview on Tuesday, Grain Traders and Processors Association of Malawi president Grace Mijiga Mhango said at a minimum of K220 per kg, traders will have to factor in issues of logistics when selling the maize at the produce markets.
She, however, said looking at the global food situation, “chances are that prices of maize could be higher this year”.
In an interview on Tuesday, agricultural policy development analyst Tamani Nkhono-Mvula observed that while the rising prices are a good development for farmers, it will mostly affect the urban consumer who depends on the market for the commodity.
He said Admarc acts as a stabilising factor on the market and its delay to start buying the grain will distort prices.
Said Nkhono-Mvula: “Admarc is an important actor because it helps to set the prices of maize, but it may not be able to buy as much as possible because it is not yet on the market when the maize is being sold at a giveaway price.
“But when you look at the other side, we should expect the bag to fetch much higher price of K15 000 because Admarc stablises the market, but if they go on the market much later, it means the consumer will buy maize at a much higher price.”
Maize is an important crop in the country’s economic set up as it plays a crucial role in the movement of inflation.
As part of the food component, maize accounts for about 45.2 percent in the consumer price index, an aggregate basket for computing inflation.