Grain traders lose Out on maize trade
Grain Traders and Processors Association of Malawi has decried losing out on the export market due to the high prices of maize on the local market compared to Zambia.
The association’s president Grace Mhango said this in reaction to a report by the Famine Early Warning Systems Network (FewsNet) indicating a rise in informal maize imports mostly from neighbouring Zambia through Mchinji Border.
Mhango said the maize from Zambia, by far the cheapest compared to local maize, is just transiting through Malawi to Zimbabwe and Mozambique.
She said: “In Zambia, Chipata side, old maize is trading at between K100 and K120 per kilogramme [kg] while on our side, it is going at between K150 and K160 per kg. This year’s maize is not yet on the market.
“On the export front, the only market buying is Zimbabwe. Zambia maize into Zimbabwe ranges between $230 [K179 400] to $240 [K187 200] per tonne while Malawi maize is selling at between $260 [K202 800] per tonne and $300 [234 000] per tonne while their
Zimbabwe local maize is trading at $250 [K195 000] per tonne.
“But the other challenge with Zimbabwe market is their payment mode. The safest for us to use as payment facility is an irrevocable confirmed letter of credit but they want cash on delivery which our traders are not comfortable with due to past experiences.”
Mhango said the development has resulted in small volumes being exported.
“The peak period for exports from Malawi with regards to maize is between December to March which is lean period for maize in the region. But you can’t push volumes of maize at harvest time. This is what our policymakers need to understand,” he said.
FewsNet figures indicate that in March alone, 5 813 metric tonnes (MT) of maize were informally imported, a 26 percent increase than the previous month and 89 percent above average.
FewsNet said throughout the recently concluded consumption and marketing year from April 2020 to March 2021, net imports totalled 40 000MT, which is 120 percent above five-year average levels of 18 000 MT.
On the other hand, informal exports totalled 707MT in March, 17 percent lower than the previous month and 27 percent below average.
In an interview on Thursday, Ministry of Trade director of trade Clement Kumbemba expressed surprise at the rising informal imports, which he said was coming on the back of more than 130 000 MT export permits issued by the ministry.
He said in the previous year, government registered a 356 000MT surplus after factoring in almost everything, including what is required by the industry and grain reserves but excluding what Admarc would sell.
According to first-round crop production estimates, the country is expected to produce 4.4 million MT of the maize, which is 42 percent above the five-year average and 29 percent above the estimated national requirement of 3.4 million MT.
In the 2019/20 season, maize production increased by 8.8 percent from 3.3 million MT in 2018/19 growing season to 3.6 million MT in the 2019/20 growing season.
