Consumers will now be spending at least 60 percent less on maize purchases, a situation that promises to improve purchasing power and cushion inflation, Business News analysis has shown.
A snap survey in some produce markets in Thyolo, Chikwawa, Blantyre, Mchinji and Ntcheu show that a 50 kilogramme (kg) bag of new maize is going at between K6 000 and K9 000 while last year’s maize is going at an average of K12 000.
This is despite maize prices escalating to K20 000 per 50 kg bag last month.
One of the traders in Chirimba Township in Blantyre, Mike Mpinganjira, said there are indications that prices of maize would go even lower as some traders are disposing their previous stocks.
Consumers Association of Malawi (Cama) executive director John Kapito described the decline as great news for consumers.
He said: “There are so many traders that were hoarding maize.
“Fortunately, this year the harvest looks good and these unscrupulous maize traders will end up selling the maize they were holding for as much as K2 000.”
Agricuture expert Tamani Nkhono-Mvula said the decrease in prices is understandable since most of these districts are now harvesting their crop and no longer depend on the market for food supplies.
Maize, as part of the food component, impacts the country’s economy given that it constitutes 45.2 percent of the Consumer Price Index (CPI), which is an aggregate basket of goods and services for computing inflation.
Although maize production increased by an estimated 24.7 percent relative to the previous year, prices of the staple grain have been on an upward spiral in the past months, currently trading at as much as K400 per kg, translating to K20 000 per 50kg bag in some parts of the country.
State produce trader Agricultural Development and Marketing Corporation (Admarc) has also been selling maize at K150 per kg, translating to K7 500 per 50kg bag.
Meanwhile, the first round crop estimates produced by the Ministry of Agriculture, Irrigation and Water Development show an increase in all crops such as cereal, legumes, roots and tubers, and livestock production, with maize, the country’s staple grain projected to increase by 8.8 percent from 3 391 924 metric tonnes (MT)in 2018/2019 growing season to 3 691 866 MT in the 2019/2020 growing season.
The increase is attributed to favourable weather conditions and increased uptake of inputs by farmers. An increased agriculture production is good news to the economy, whose growth depends more on the performance of the agriculture sector.
In recent months, inflation has been declining as a result of falling maize prices with February inflation recorded at 11 percent. Catholic University dean of social sciences Gilbert Kachamba observed that inflation will further go down as the country nears the harvesting period.