Govt policy pushes up maize prices
Ministry of Agriculture, Irrigation and Water Development decision to adjust upwards farm-gate maize prices has affected seasonal decline of the staple grain, Food and Agriculture Organisation (FAO) has said.
In its country brief for Malawi, FAO said prices firmed up following an increase in farm-gate price from K150 per kilogramme (kg) to K180 per kg, coupled with heightened export demand from neighbouring countries, reflecting the poor harvests and expectations of an increase in institutional purchases in 2019 despite a larger output.
As a result, nominal prices of maize grain rose steeply in July and firmed up in August 2019, having generally risen since mid-2018 with the national average maize price, at K 217 per kg, being 80 percent higher year-on-year as of August.
FAO observes that given the current levels and the historical seasonal trends, prices could surpass K250 per kg before the harvest period in March 2020 and, consequently, resulting in an aggravation of food insecurity conditions.
“Food insecurity is, however, expected to worsen in the next months, particularly for rural households in the South that were affected by floods,” reads the brief in part.
In April 2019, the ministry set the official maize-buying/farm-gate price at K150 per kg. After failing to buy at the farm-gate price, State produce trader Agricultural Development and Marketing Corporation (Admarc) announced in August that it will buy maize at K200 per kg, about 30 percent above last year and about 40 percent above the five-year average, to fulfil its 16 000 metric tonnes (MT) quota.
Minister of Agriculture, Irrigation and Water Development Kondwani Nankhumwa said last week during the opening of the 16th National Agriculture Fair that government is aware that in some areas, maize did not do well despite the country registering a surplus.
He said since the National Food Reserve Agency (NFRA) announced plans to buy maize; more than 260 organisations have expressed interest to sell maize to the agency, an indication that the country has more than enough maize supplies.
Consumers Association of Malawi (Cama) executive director John Kapito said the rising maize price is making it tough for the consumers, but it is even worse for the minimum wage earner, who out of K35 000, has to cough more for food.
FAO estimates that the number of food insecure people is estimated to have fallen on a yearly basis from 2.2 million to 0.67 million in the July-September 2019 period, prompted by the production upturn.
