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‘Fertiliser cost raises maize prices’

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An increase in fertiliser prices is said to be pushing maize prices up, a trend that will remain such and consequently affect household expenditure, an assessment by World Food Programme (WFP) indicates.

A 50 kilogramme (kg) bag of NPK is fetching K66,500 on the market while Urea is being sold at K80,000.

The prices have risen by an average of K10,000 as in November most retailers were pegging a 50kg bag of Urea at K70,000 and NPK at K55,000.

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According to a ‘Survival Minimum Expenditure Basket in Malawi’ released by WFP last week, farmers are selling their maize at higher prices to obtain enough income to cover for the rising cost of fertilisers and other inputs.

“The anticipated poor production of maize in the coming season due to increased cost of fertilisers mostly drove the prices up. Farmers sell their maize at higher prices to obtain enough income to cover for the rising cost of fertilisers and other inputs,” the assessment reads.

On the other hand, WPF notes in the assessment that traders are also hoarding their maize stocks to sell later next year when the prices are expected to be even higher.

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“The state grain trader, the Agricultural Development and Marketing Corporation [Admarc], however announced that it will start selling maize from its market outlets at K300 per kg, beginning 1 December 2022.

“This will likely dampen maize grain prices on the market. The rising price of maize significantly affects household’s expenditure as maize is the main consumed commodity in Malawian diets,” the assessment adds.

Maize grain takes up over 50 percent of the country’s Consumer Price Index, an index used to calculate inflation rate.

Currently, the staple food is selling at an average price of K490 per kg, an increase of 23.1 percent from K398 per kg last month.

Prices rapidly increased in the second half of the year, from K214 per kg in June, according to the report.

An assessment done early this year by the World Bank indicated that soaring fertiliser prices are driven by a confluence of factors, including surging input costs, supply disruptions caused by sanctions and export restrictions.

While Admarc opened its selling points across the country, our snap checks have found that only a few depots have the commodity, implying households keep accessing the commodity from vendors.

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