The Reserve Bank of Malawi (RBM) says the country’s inflation outlook remains favourable owing to a surplus in maize output last year and a forecast of a similar trend this year.
RBM spokesperson Onelie Nkuna said this in the context of a latest report by the International Food Policy Research Institute (Ifpri) report, which showed that maize prices rose by six percent in December 2020 alone.
The Ifpri maize outlook and supply update showed that the grain prices, currently at an average price of K200 per kilogramme (kg) or K10 000 per 50 kg bag, are two percent higher than the previous month (November) and are the highest in Southern African Development Community markets.
In a written response on Friday, Nkuna said the increase in maize prices registered in December 2020 was seasonal, highlighting that maize prices were generally stable in 2020 and even lower compared to the levels witnessed in 2019, a reflection of a good harvest in the last season.
She said: “This trend will likely continue into 2021 as the country has enough maize supplies until the next harvest. You may recall that the country produced 3.8 million tonnes of maize last year, which is higher compared to the country’s maize requirement of 3.1 metric tonnes, indicating surplus production in the year.”
Maize, as part of the food component, has a direct impact on the country’s inflation rate as it accounts for 45.2 percentin the Consumer Price Index, which is an aggregate basket of goods and services for computing inflation.
The country’s year-on-year headline inflation between January and November 2020 averaged 8.7 percent, which is way below the average price recorded during the same period in 2019.