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Malawi records year-on-year low maize prices

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Retail prices of maize have remained generally stable since the start of the harvest in April 2020, rising by only nine percent in months up to October, compared to 39 percent in the same period in 2019, a report by Food and Agriculture Organisation (Fao) indicates.

The report, dated November 6, says, on yearly basis, retail prices were also lower, owing to the adequate-supply situation.

“At the subnational level, prices were generally higher in southern districts compared to the markets in the centre and north, reflecting the lower levels of production in the south,” the report reads.

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However, despite that maize has been attracting fairly low prices, cases of food insecurity have increased in the country due to negative effects of Covid-19.

Based on latest food security phase classification assessments conducted mid this year, 2.6 million people are estimated to be food insecure and in need of humanitarian assistance until March 2021.

According to Fao, nearly 80 percent [2.3 million people] of this population is located in rural areas and mostly in the Southern Region

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“Although cereal production increased in 2020, resulting in average to above average staple food supplies at the household level, the effects of the Covid-19 pandemic have driven up the current rates of food insecurity, particularly among the urban households which likely experienced more extensive job and income losses.

“In the rural areas, notably in the southern districts of Nsanje, Neno and Balaka, localised weather shocks that caused shortfalls in cereal production in 2020 are also key factors that stressed food insecurity,” the report adds.

According to recent data from the Emergency Agriculture and Food Security Surveillance System—a survey conducted jointly by the government and Fao— households in the Southern Region are also more reliant on food purchases and this factor is expected to worsen the effects of high grain prices on households’ food security.

Recently, the Reserve Bank of Malawi indicated that headline inflation had been declining since January 2020 and the inflation outlook appeared favourable.

The central bank projects that inflation is likely to remain low up to December 2020 and would remain below 10 percent in 2021.

Headline inflation has declined from 11.5 percent in January 2020 to 7.1 percent in September 2020 due to relatively lower food prices compared to 2019, according to the bank

Commenting on the development, economics analyst Betchani Tcheleni said this implies that the country’s macroeconomic fundamentals were not as bad as people thought.

Currently, planting of cereal crops in the 2020-21 rain-fed agriculture season is underway and is expected to be finalised by the end of December 2020.

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