Government has announced that Agricultural Development and Marketing Corporation (Admarc) will now be selling maize at K205 per kilogramme (kg), up from K160 per kg.
While Consumers Association of Malawi (Cama) has described the development as regrettable, the Ministry of Agriculture has said the adjustment is due to the cost of procuring the maize and the loan which Admarc obtained from commercial banks, which will require to pay with interest.
Secretary for Agriculture Erica Maganga announced the new price in her communication, dated September 20 2021 and addressed to Admarc general manager.
She said: “The price was arrived at upon observing the cost of procuring maize as well as considering that the significant amount of resources for the procurement of maize have been sourced from the commercial banks hence the price also factors in the cost of loan repayment.”
Maganga said the ministry expected strict adherence of the price enforcement to be done, to avoid any abuse.
“In addition, Admarc should be submitting weekly progress reports on maize sales to my office for easy monitoring of the process when the selling season opens,” writes Maganga in the letter.
In the same breath, the ministry’s spokesperson Gracian Lungu said Admarc proposed to sell its maize at a relatively higher price to still make profit, “so that they effectively repay their loan”.
“Admarc obtained a loan which they are supposed to pay back with interest. For that reason, they need to sell their maize, which they mostly bought at K200 per kg, at an adjusted cost to make some profit because there are other costs such as transportation and warehousing,” said Lungu.
But consumer rights activist John Kapito in a separate interview said the adjustment was “shocking”, because it is coming at a time most Malawians are facing serious hardships.
Said Kapito: “The cost of living is going up every day and the only thing that stabilises prices of products on the market is the maize price and to imagine government has decided to adjust the selling price, it must also consider the repercussions this will have on people’s overall earnings.
“This is really sad news and will have a negative impact and effect on the general cost of products considering we have an economy that is reeling from serious challenges at the moment. This development will also worsen people’s entire cost of living.”
Admarc started buying maize on August 2 2021 at K150 per kg and it plans to buy 300 000 metric tonnes (MT).
The corporation has 441 established markets nationwide, plus an additional 277 temporary markets.