A latest Famine Early Warning System Network (Fewsnet) report says the continued kwacha depreciation against major trading currencies is negatively affecting the importation of the country’s staple grain, maize.
This development comes at a time there is a serious shortage of the grain on the market with prices at a six-year high, according to local welfare monitoring organisation, Centre for Social Concern (CfSC).
The report says the continued depreciation of the local unit, currently trading at K732 to a dollar in authorised dealer banks is limiting the importation of maize to alleviate its shortage and stabilise prices on the market.
It says State-owned Agricultural Development and Marketing Corporation (Admarc), which typically sells maize in its depots at subsidised prices in the lean season up to March, began to have erratic supplies across the country in December last year, which is a notable market anomaly.
Reads the report in part: “With below average 2016 harvests, many countries may face shortages over the 2016/17 marketing year that is greater than the current shortages, given the low carry-over stocks expected at the end of the 2015/16 marketing year.
“Maize prices will continue to increase until the start of the 2016 harvest and remain above respective five-year average levels across the region. Price increases are expected to be especially high in Malawi given the large local deficits and ongoing currency depreciation.”
The report warns that the delayed start of the season will exacerbate maize shortages across the region, with significant shortages in Malawi as Admarc supplies have already started to run out.
While admitting that Malawi is in maize crisis, Admarc chief executive officer Foster Mulumbe, however, said since the opening of Admarc markets on September 18 2015, it has managed to sell 26 000 metric tonnes of maize from the 55 000 metric tonnes it had in stock with the remaining expected to take Malawi to the next harvest in March.
He said Admarc has been rationing maize to 20 kilogrammes (kg) per person to curb activities of vendors who buy in bulk and resell on the market at a higher price.
Admarc is selling a 50 kg bag of maize at K5 500 ($8) while traders are selling the same at double the price at K11 000 ($15).