Treasury has given State produce trader Agricultural Development and Marketing Corporation (Admarc) a guarantee to borrow up to $10 million (about K6.9 billion) for maize purchases in the 2016 marketing season.
Ministry of Finance, Economic Planning and Development spokesperson Nations Msowoya, in a telephone interview at the weekend, said government has already issued the guarantee to enable Admarc open its markets in good time.
He said government appreciates the challenges Admarc faces to access maize months after private traders have combed the market.
Said Msowoya: “Thus, unlike in the past, this year we want to ensure Admarc opens its markets on time so that it has a fair competition with private traders. We believe $10 million should be enough to enable the corporation source maize to last the whole lean period next year.”
Admarc chief executive officer Foster Mulumbe confirmed knowledge of the guarantee in an interview on Wednesday, but he could not say when the corporation plans to open the markets as well as the quantity it will buy.
News of the guarantee has come a day after The Nation reported that private traders have invaded the market where they are currently buying partially-dry maize at as low as K60 per kilogramme (kg).
On Monday, Minister of Agriculture, Irrigation and Water Development Allan Chiyembekeza, reacting to reports of private traders being in the market, cautioned that it would be suicidal for Admarc to go with the flow.
He said there were a number of factors the corporation considers before opening its maize markets.
The minister said Admarc cannot buy partially-dry maize whose moisture content hovers around 14 to 18 percent as is the case at the moment.
Last year, Admarc secured loans of K1.9 billion (about $2.8million) from FDH Bank and K100 million (about $149 000) from AHCX, a commodities exchange owned by AHL Group.
On March 19 this year, our sister newspaper, Weekend Nation, also reported that Malawi Energy Regulatory Authority (Mera) in February resolved to divert K2.964 billion (about $4.4million) from the Price Stabilisation Fund (PSF) to enable Admarc buy maize, a decision Minister of Finance, Economic Planning and Development Goodall Gondwe described as illegal and a subject of investigation.
Malawi is expected to face another maize shortage this year after the Ministry of Agriculture, Irrigation and Food Security last month announced that output would further drop by two percent this season after a 30 percent fall last year that has left at least 2.8 million people starving. n