Maize price escalates
Maize prices continue escalating in most parts of the country causing panic among consumers.
But the Reserve Bank of Malawi (RBM) has since blamed the situation on speculation.
Business Times spot checks in some produce markets across the country show that a 50 kilogramme bag of maize is now selling between K12, 000 to K15, 000 from K8, 500 in July.
Maize, as part of the food component, impacts the country’s economy given that it constitutes 45.2 percent in the Consumer Price Index-an aggregate basket of goods and services for computing inflation.
The upwards trajectory in the maize prices has seen inflation also rising, standing at 9.5 percent in August 2019.
Food inflation was seen at 14.6 percent in the month from 14.2 percent in July 2019.
Some maize traders we spoke to yesterday say the prices have been on the increase due to low supply.
“We expect the prices to continue rising till next harvesting season because there is no maize out there,” said Frank Kanjinga, a maize vendor at Mbayani Township Market in Blantyre.
Consumers are also feeling the pinch.
Hilda Pawo, who had just purchased four buckets of maize at K4, 800 said she could not afford a 50 kg bag
“We need at least 12 buckets a month but we cannot manage to buy in bulk that’s why we buy in portions,” she said.
A recent acute food insecurity analysis by the Integrated Food Security Phase Classification (IPC) projects that from October 2019 to March 2020, about 1.06 million people will be in a crisis, and 3.58 million people will be under stress while over ten million people will be minimally food-insecure.
But RBM Governor, Dalitso Kabambe, said in an interview that the price movement is influenced by speculation.
He maintained that the country’s inflation will continue on a downward trajectory and reach 5 percent in the first quarter of 2021.
“We are surprised that prices have almost doubled. There are two schools of thought; one that the region was affected by effects of climate change, and probably the demand in the region is high and most of the commodity is going outside the country.
“Secondly it could be that last year we had huge stocks of maize which could dampen the prices and that market forces are determining the price currently,” Kabambe said.
Economics Professor at Chancellor College, Ben Kalua, said the Central Bank is not realistic since Malawi’s economy depends on agriculture which is dependent on changing weather conditions.