Malawi will experience a record increase in maize prices in the 2016/17 marketing season largely due to no carry-over stocks from last season occasioned by the effects of El Nino, a latest report has said.
The Famine Early Warning Systems Network (Fewsnet) report released on Friday said despite reduced maize prices during the harvest season, maize prices within the region, including Malawi, will escalate due to the crop’s deficit.
“The below average 2016 harvests and low carry-over stocks at the end of the 2015/16 marketing year will cause many countries to face shortages over the 2016/17 marketing year that are greater than the current shortages,” reads the report in part.
The report said because of this, prices across the region are not expected to decline as much as they typically do during the harvest and post-harvest period.
“Zambia and South Africa will limit their capacity to export to deficit countries. Malawi will have no carry-over stocks going into the 2016/17 marketing year, causing concern over how high their prices may reach,” said the report.
Ministry of Agriculture, Irrigation and Water Development second round crop estimates show that Malawi is expected to produce 2.4 million tonnes of the staple grain, which is 12.4 percent below last year’s output at 2.7 million tonnes.
Malawi’s national maize requirement for human consumption, seed, stock feed and industrial use is pegged at 3.2 million tonnes, which means the country will have a deficit of one million tonnes.
The Fewsnet report further said maize prices are likely to remain well above five-year average levels across the region, adding that price increases are expected to be high in Malawi and Mozambique, given large deficits, depletion of public stocks, limited imports and expected below average 2016 harvest.
Civil Society Agriculture Network (CisaNet) executive director Tamani Nkhono-Mvula, in an interview on Sunday, said it is not surprising that Malawi is expected to experience higher maize prices due to the impact of El Nino that affected most parts of the region.
He advised authorities to start looking at alternative ways of dealing with the deficit.
“We have to make sure that we invest in winter cropping as well as rollout the much talked about irrigation initiative this year to increase maize production. Again, it would really help if Admarc [Agricultural Development and Market Corporation] engaged in contract farming so that it can be selling its own maize at reduced prices,” said Nkhono-Mvula.
Meanwhile, State-produce trader Admarc has started buying maize from private traders and farmers to fill up their stock in anticipation of the lean months.
Admarc chief executive officer Foster Mulumbe said on Sunday they have so far bought maize in excess of 5 000 tonnes.
“The inflow this year is quite encouraging,” he said.
Maize is a critical crop to the country’s economy and has a direct bearing on inflation by contributing about 50.2 percent to the consumer price index (CPI).