Legumes under-pricing cost Malawi $60 million
Malawi lost over $60 million (about K43 billion) in export revenue for pigeon peas in 2015 due to under-declaration of prices, largely blamed on disregard for structured marketing system, it has been established.
A report by African Institute of Corporate Citizenship (AICC) on Malawi pigeon peas outlook for April to September 2016, says the loss signals the continued use of the informal markets for pigeon peas in Malawi.
Reads the report in part: “Public standards are poorly enforced at the domestic level, and often effective monitoring takes place only on exported product. High transaction costs also hinder export opportunities.”
The report says, for example, the cost of exporting a 20-foot container of pigeon peas to Mumbai in India is $1 800 (K1.3 million) for Malawi compared to an average of $800 (K584 000) for Tanzania and $500 (K365 000) for Kenya.
Malawi has two structured markets for commodities in AHL Commodities Exchange (AHCX) and Agriculture Commodities Exchange (ACE) for Africa, but they are not fully utilised.
Ministry of Industry, Trade and Tourism spokesperson Wiskes Nkombezi in an interview yesterday said that while it is difficult to comment on under-declaration, the underutilisation of the available structured market for commodities has compounded the problems.
Malawi Revenue Authority (MRA) deputy director (corporate affairs) Steve Kapoloma yesterday asked for more time before commenting on the matter.
But a legumes industry analyst Maurice Chimbilima Gondwe, who is also a senior consultant at Export Development Alliance, said despite accessing international markets, exporters are not organised and some lack skills; hence, costing the country much-needed foreign exchange.
The AICC report shows that in 2015, Malawi exported 49 673 tonnes of pigeon peas through ACE, AHCX and other formal trade portals, representing one percent of the world’s demand.
Tanzania, the second largest pigeon peas producer in Africa, surpasses Malawi in international trade.
ACE operations manager in the trade department Cuthbert Nyirenda yesterday said some unscrupulous traders take advantage of the vulnerable farmers.
AHCX general manager Davis Manyenje is on record as having said that legumes have the potential to help the country generate $1 billion (about K700 trillion) in foreign exchange to complement the struggling tobacco.
