Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has expressed worry over maize production this season, saying rising prices of inputs such as fertiliser will affects output of the staple crop maize and pile pressure on food inflation in the New Year.
This is contained in a report titled ‘Assessment of the Business Environment in 2022: The Private Sector Perspective’, published by the chamber recently.
The report, signed by MCCCI President Lekani Katandula and Chief Executive Officer Chancellor Kaferapanjira, indicates that the pegging of a 50 kilogramme (kg) bag of fertiliser at K55,000 from K25,000 for the 2022-23 season is a risk for maize output and price in 2023.
“The increase in fertiliser prices will increase production costs for maize which in turn will increase pressure on maize prices and other agricultural outputs in general since most of the farmers are smallholder farmers who cannot afford fertiliser at such high prices.
“The impact on inflation will be that food inflation is expected to remain elevated in the first quarter of 2023 until the harvesting season and the output shall determine the food inflation in the third and fourth quarter of 2023 which eventually will impact the macro economy,” the assessment reads.
“In the year 2022, supply-demand mismatches triggered inflation upwards and if these persist for much longer in 2023, it could force the Reserve Bank of Malawi to implement contractionary monetary policy further to counter inflation,” it adds.
Agriculturalist Leonard Chimwaza said the country needs to commercialise and mechanise agriculture, focus on irrigation and establish policies that are agriculture friendly.
He singled out the need to establish waivers on importation of agriculture machines.
Malawi University of Business and Applied Sciences-based economist Betchani Tchereni said the government should roll out mega farms in the shortest time possible.
“The country should quickly implement policies that were set out such as mega farms because if this fails, food insecurity will lead to rising food inflation which will be passed on to headline inflation,” Tchereni said.
Minister of Agriculture Sam Kawale was not immediately available for a comment but, in his latest Facebook post, said delivery of fertiliser under the Affordable Inputs Programme gained tremendous pace in the last week.
Last year, Malawi’s maize output declined by 18.9 percent due to a combination of factors like drought, tropical cyclones and inadequate supply of subsidised fertiliser.
According to the Ministry of Agriculture, production fell to 3.7 million metric tonnes from 4.6 million metric tonnes in 2021.
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.