Low grain reserves To push up prices

Despite a surplus in maize production this year, levels of stocks in the national grain reserves and Admarc remain below target, a situation an agriculture expert says can negatively impact on prices, especially for urban dwellers.

Both Agricultural Development and Marketing Corporation (Admarc) acting chief executive officer (CEO) Felix Jumbe and National Food Reserve Agency (NFRA) CEO Nasinuku Saukira have confirmed the low levels of maize stock.

Figures show that Admarc currently has 55 000 metric tonnes (MT) against the required 135 000MT while NFRA’s strategic grain reserves (SGR) are holding 50 000MT against the required 217 000MT.

This is despite the country producing 3.7 million MT of maize against the national requirement of 3.3 million MT, creating a surplus of 400 000MT.

In an interview on Tuesday, Jumbe said the State produce trader plans to buy another 80 000MT to meet the required threshold.

“This should be enough for us to service those who will need maize in our markets,” he said, adding that the institution is waiting for the official selling price from Ministry of Agriculture.

Admarc has been buying maize at K200 per kilogramme (kg).

The SGRs comprise 8 000MT emergency stock and 7 600MT safety net stock for non-emergency response and another 38 000MT stablisation stock.

By mid-October 2020, Admarc reported having procured only 55 000MT out of a planned 200 000 MT, and the NFRA had procured just under 30 000MT of a planned 200 000MT. NFRA normally buys at least 200 000MT of maize in a year while Admarc sells over 50 000MT.

Normally, Admarc stocks maize for sale at subsidised prices during the lean season while the NFRA stocks maize for humanitarian and emergency purposes.

In recent weeks, maize prices have been rising from an average of K7 000 per 50 kilogramme (kg) bag in August to the current K12 000.

In its October 2020 food security outlook, Famine Early Warning Systems Network (FewsNet) observed that typical seasonal price increases are expected in the coming months, driven by growing demand as more households run out of own produced food as well as demand from government institutions who plan to buy between 200 000MT and 400 000MT of maize grain.

This is coming on the back of 2.62 million people facing acute food insecurity between October 2020 and March 2021, with a food gap period of anywhere between two to five months depending on the location, according to the Malawi Vulnerability Assessment Committee.

Agriculture expert Tamani Nkhono-Mvula  said in an interview on Tuesday that the low levels of maize stocks will give an opportunity to traders to take advantage of the situation to increase prices.

He said: “For the urban market, consumers may end up being punished by private traders who can manipulate prices as Admarc prioritise rural markets.

“Before traders start hoarding maize for better prices, government needs to come in to ensure that the country has enough maize, whether this will mean importing food or buying at higher prices.”

Maize is the country’s staple crop.