Government’s desire to boost production of pigeon peas as part of its wider diversification strategy to supplement foreign exchange earnings from tobacco faces a hitch six months after the Indian Government imposed an import cap on the commodity.
The cap meant that countries such as Malawi were given a quota of 200 000 tonnes of legumes compared to 703 503 tonnes the previous year to protect local prices following a record production.
By the time the ban was being effected, India had already imported 160 000 tonnes of the commodity and had 40 000 tonnes landing at the end of August, which left no space for new import contracts.
The development has left local pigeon peas farmers stuck with last year’s crop in excess of over 600 tonnes as prices continue to tumble to an average of K40 per kilogramme (kg) from a high of K700 per kg two years ago.
The development has also put their future prospects in jeopardy as some input supplying companies have backed off.
In an interview on Tuesday, Nandolo Farmers Association projects officer Amos Bandawe said potential buyers on the local market are offering K120 per kg, which is K200 less than the set minimum prices.
“We have buyers on the domestic market, but what they are offering is way below the production cost. As a result, farmers continue to be exploited.
“We believe that securing new international markets and having buyers outline their demand before-hand will help increase competition and pricing of the product if it is to remain as an alternative export to tobacco,” he said.
Farmers Union of Malawi (FUM) president Alfred Kapichira-Banda said the gloomy picture has left some input suppliers pulling out of the market, which could also affect production.
“We used to have companies supplying inputs to farmers and have the farmers pay after sales. Unfortunately, most of these companies are pulling out.
“This has left a lot of farmers out of the trade. There are fears that it will mostly be farmers on contract who will produce this season,” he said.
AHL Commodity Exchange limited (AHCX) communications manager Thom Khanje said they are still working to partner with other buying entities for both raw and semi-processed pigeon peas as an alternative to the Indian market.
Malawi Investment and Trade Centre (Mitc) chief executive officer Clement Kumbemba, while admitting that pricing remains a challenge, said a possible memorandum of understanding (MoU) with the governments of Malawi and India could offer a turn-around.
“The issue is that there are people on the ground that can buy the product and are offering K120 per kg, but our farmers are not happy with the price.
“As Mitc, are working with other organisations to look for markets in Pakistan and Dubai for better prices,” he said.
Kumbemba said plans are at an advanced stage to establish a market intelligence unit. n