Arecent report by the United Nations Conference on Trade and Development (UNCTAD) on Transforming Rural Economies says dependency on commodity exports is slowing economic growth in least developed countries (LDCs) such as Malawi.
The 2015 Least Developed Countries Report says the recent dynamics of international commodity prices have had a major impact on the LCDs export earnings with Malawi earning $337.3 million (K189 billion) from the country’s largest export commodity—an eight percent drop from last year’s $366.3 million (K205 billion).
Tobacco, sugar, coffee, tea and pulses constitute Malawi’s top five export products.
According to the report, all commodity price indices declined from January 2012 to May 2015, to levels similar to those of the 2009 crisis, as a result of weakening demand, increasing supplies (following overinvestment during the period of high prices), a stronger dollar and unusually large harvests.
“The share of agriculture in total merchandise exports has also generally fallen since the mid-1990s.
In Malawi, the agriculture sector contributes approximately 80 percent of export earnings, with agriculture exports consisting of only a small number of products, especially tobacco. n