The Parliamentary Committee on Agriculture says maize traders have more staple grain than Admarc, observing that the increase in maize buying will help the State produce trader to buy the desired volumes.
The committee chairperson Sameer Suleman said this in the context of the directive by Minister of Agriculture, Irrigation and Water Development Kondwani Nankhumwa on Friday to enable Agricultural Development and Marketing Corporation (Admarc) to increase maize buying price from K150 per kilogramme (kg) to K200 per kg.
“What was happening was that traders were offering better prices to farmers than Admarc, and as a result, Admarc could not buy the maize.
“I can tell you that at K200, the prices have now become competitive and after that announcement, big traders have started offering maize to Admarc,” he said.
Agricultural expert Tamani Nkhono-Mvula, in an interview on Friday, said he was not surprised that Admarc was facing challenges because most of the maize was already bought by traders.
“This is a perennial problem. If Admarc wants to buy from smallholders then the most realistic time to buy is in March or April not now,” he said.
The upward adjustment comes weeks after Admarc opened its markets to buy the staple grain at K150 per kg, but failed to secure the desired volumes as prices were not lucrative to attract farmers.
But Nankhumwa said government wants to procure the desired maize volumes through Admarc to ensure food security and maize market price stability.
The State produce trader borrowed K2.5 billion from a commercial bank for that purpose.
The minister said to complement maize procured by Admarc, National Food Reserve Agency will also start buying maize to replenish the Strategic Grain Reserve (SGR).
A recent study by the International Food Policy Research Institute (Ifpri) found that Malawi has the highest level of maize price volatility compared to other sub-Saharan African countries.
The results of third round Agriculture Production Estimates Survey indicate that this year’s maize output is at 3.3 million metric tonnes (MT), a 24.7 percent increase compared to the 2017/18 final round estimate of 2.6 million MT. According to the country’s SGR guidelines, the SGR size should be 217 000MT, which comprises 95 000MT buffer stock, 8 000MT emergency stock, 76 000MT safety net stock for non-emergency response and 38 000MT stabilisation stock.