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Cost of food seen rising further

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By Rebecca Chimjeka

The International Monetary Fund (IMF) sees a possible continued elevated price of food in Malawi and other sub-Saharan Africa countries, a thing which could push headline inflation further up.

Food accounts for roughly 40 percent of the region’s consumption basket—a measure of goods and services used to measure consumer price index (CPI)

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In Malawi, the staple grain, as part of the food component, has a bearing on inflation movement as it constitutes about 45.2 percent in CIP.

In a blog, IMF Senior Economist working on regional surveillance in the IMF’s African Department Seung Mo Choi predicts continued elevated food inflation in the region.

The forecast is premised on past trends where food inflation increased throughout 2019.

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On the global scale, the post suggests, “the recent increase in food inflation is attributed to rising oil prices (which raise fertiliser prices and transportation costs), droughts and export restrictions imposed by major food exporters, and stock piling in some countries.

In Malawi, food inflation has been volatile, partly following the economy’s seasonal cycle, seen at 11.8 percent in October 2021.

Headline inflation inched upwards by 0.9 percentage points during the month under review to 9.8 percent, according to latest figures from the National Statistical Office.

The IMF suggests that fighting food insecurity through targeted social assistance and insurance can help populations cope.

It says the countries should be avoiding trade barriers and improving access to finance, seed stocks, insecticide, fertiliser, anti-erosion measures and irrigation.

Centre for Social Concern (CfSC) has been lamenting the elevated cost of living in the country.

CfSC Economic Governance Programmes Officer Bernard Mphepo said in an interview yesterday that there was a need for hasty intervention to tame the skyrocketing food inflation.

“It is important for the government to put strategies in place to ensure sustainability of supply of food items. For example, the government must ensure availability of maize in Admarc depots which is are in hard-to-reach areas” he said.

And in a separate interview, agriculture expert Tamani Nkhono Mvula said demand for food is seen rising as the population increases.

He said, however, agriculturer output remained low, hence the need to revitalise the sector.

“Population increase, climate change and the Covid pandemic remain great threats. Increases in agriculture commodities’ prices like fertiliser in the past years has worsened food prices,” Nkhono Mvula said.

Trade Minister Sosten Gwengwe yesterday said the government was working tirelessly to address the problems.

“In the next budget, the government will focus on tax measures that will relieve the public from pain” Gwengwe said.

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