Maize prices have continued to escalate despite the country having an estimated surplus of 355 000 metric tonnes (MT), a development experts say threatens economic gains.
Malawi has seen early pressure mounting on food prices, particularly maize, largely due to deficits recorded in most Southern Region districts affected by floods caused by Cyclone Idai. The situation has pushed a kilogramme (kg) of maize to K250 or K12 500 per 50 kg bag, which is K5 000 above government’s set minimum price.
In an interview on Monday, Catholic University dean of social sciences Gilbert Kachamba said despite the selling of maize at a higher price being good for farmers, rising maize prices could continue pushing inflation up.
On his part, Economics Association of Malawi (Ecama) president Chikumbutso Kalilombe observed that if State producer trader Agricultural Development and Marketing Corporation (Admarc) will not buy enough maize to meet its demand during the lean period, prices will likely rise during the lean period and this may pile pressure on inflation, currently at nine percent.
While it is good that traders are offering prices above the minimum price, Ministry of Agriculture, Irrigation and Water Development Principal Secretary Gray Nyandule Phiri said there is need to strike a balance.
During a press briefingin Mzuzu last week, Reserve Bank of Malawi (RBM) Governor Dalitso Kabambe said that seasonal food price pressures are key a threat to inflation during the second half of 2019.
“Monetary Policy Committee observed that this is temporary and will likely unwind in the near term,” he said.