FewsNet projects high maize prices

Famine Early Warning Systems Network (FewsNet) says maize prices will rise above average despite adequate availability of the staple grain.

In the report, FewsNet projects that the elevated prices are expected in the remainder of the 2020/21 marketing year while in other Southern African countries the prices will be near average.

Maize is currently selling at K180 per kilogramme (kg) or K9 000 per 50 kg bag.

But FewsNet says Malawi is expected to have a net surplus of about 500 000 metric tonnes (MT) and informal flows from neighbouring countries will continue to increase in response to favourable prices.

Reads the report in part: “Malawi’s above average domestic supplies, regional imports and the ongoing formal maize export ban are expected to result in very well supplied domestic markets this marketing year.” 

During the 2018/19 farming season, maize output was at 3.3 million MT, but this year, according to the first-round agricultural production survey, output was estimated to have increased to 3.6 million MT, translating to a jump of 8.8 percent.

The Ministry of Agriculture and Food Security put the annual national maize requirement  at three million MT.

Commenting on the report, agriculture expert Tamani Nkhono Mvula said with the weather patterns the country experienced last year and also the quality of the crop, the country will have a surplus this year.

He said that in the absence of estimates, there is a lot of speculation that forces traders to hoard maize, creating an artificial scarcity on the market.

Said Mvula: “The crop estimates could have helped to provide a scope of distribution of food in the country. 

“In the current situation, localised scarcity in maize is likely to happen which also has a bearing on the prices.”

Maize is an important crop in the country and, as part of the food component, it impacts the economy as it constitutes 45.2 percent of the Consumer Price Index (CPI), which is an aggregate basket of goods and services for computing inflation.

This means that any movement in the price of maize either way has a direct bearing on inflation.

The Reserve Bank of Malawi has maintained this year’s inflation targetof 9.4 percent banking on favourable weather patterns and production.