Maize prices rise, buyers feel pinch
Prices for maize, Malawi’s staple commodity, continue to rocket, averaging K38,000 per 50 kilogramme bag, which is way too high for average Malawian consumers.
At the beginning of January this year, the commodity was being sold at K22,000 in most parts of the country.
However, the price has been on an upward spiral, as, among other things, State-run grain trader the Agricultural Development and Marketing Corporation (Admarc) is not operating at full capacity following the firing of its staff.
In an interview Monday, Centre for Social Concern Programmes Coordinator responsible for economic governance Bernard Mphepo said it is not surprising that the staple grain is fetching such high prices.
He attributed the situation to the closure of Admarc and seasonality of the economy as food supply dwindles during the lean season.
He said that the situation will remain as long as Admarc remains closed, which could be compounded by low agricultural harvests due to challenges faced by the Affordable Inputs Programme this year.
“The immediate solution is having Admarc start working again and freeing it from political bondage because the moment Admarc operates under political influence, things fail,” Mphepo said.
In a separate interview, economist from the Malawi University of Business and Applied Sciences Betchani Tchereni said consumers are now at the mercy of vendors.
He added that if there are no immediate interventions, the situation could be inflationary.
“Maize contributes the highest percentage to the inflation basket. Therefore, this kind of increase will reflect on inflation and the central bank may be propelled to also increase the policy rate, whose impact will knock on interest rates,” Tchereni said.
Minister of Agriculture Sam Kawale said recently that the closure of Admarc was a step towards its restructuring.
He promised Malawians that, soon, Admarc will be back on its feet serving the country as per its purpose.
Maize remains Malawi’s staple grain, contributing about 45 percent to the Consumer Price Index.
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.