Admarc stares at K5.3 billion loss in maize sale
Agricultural Development and Marketing Corporation (Admarc) is expected to make a 20 percent loss after dropping maize-selling price by 20 percent to K160 from K200, a price at which they bought the maize.
Admarc announced Tuesday that it had opened all markets across the country, meaning that the 133, 000 metric tonnes (MT) of maize in the grain marketer’s custody are up for grabs.
Admarc spokesperson Agnes Chikoko Ndovi acknowledged that the maize had been heavily subsidised to benefit the poor.
“Government does subsidise maize to benefit those that cannot afford the maize that is being sold on the market so that people who are poor should have food on their table,” Chikoko Ndovi said.
She added that they had rationed the maize to maximum allowable quantity of 30 kilogrammes (kg) per person and would work with traditional leaders and area committee members to make sure that the maize was sold to intended beneficiaries.
Admarc bought 133,000 MT, translating to 133 million kg, and spent K26.6 billion at K200 per kg on the commodity.
However, it will earn K21.2 billion at K160 per kg and the loss of K5.3 billion will have to be footed by the government.
Meanwhile, stakeholders have applauded the grain marketer for coming in to protect poor consumers at a time maize is being sold at K11,000 per 50kg bag and citizens are swimming in economic problems due to the Covid-19 pandemic.
Even though Admarc is striving to make its commercial part work year in, year out and become self-reliant, The Polytechnic-based economist Betchani Tcheleni said there was nothing wrong with what Admarc has done.
He said, by dropping the price of maize, Admarc was playing its social responsibility role.
Tcheleni added that the set price would result in increased traffic to Admarc markets because people, including vendors, would be trekking to selling points to purchase the commodity.
“You will see that, instead of the intended beneficiaries benefiting, there are going to be traders taking advantage [of the situation] and the very same people who should benefit will end up buying at a higher price still. As such, they [Admarc] will have to find means and ways of ensuring that people that really need maize buy it,” Tcheleni said.
Consumers Association of Malawi Executive Director John Kapito also applauded Admarc for coming into the market at this point of the wet season.
Kapito, however, said Admarc officials should be vigilant, tighten security and make markets corrupt-free in order to make sure that intended beneficiaries are buying the maize because people have already suffered due to the Covid-19 pandemic.
Justin Mkweu is a fast growing reporter who currently works with Times Group on the business desk.
He is however flexible as he also writes about current affairs and national issues.
