The National Food Reserve Agency (NFRA) said it has spent K6 billion of its K12 billion allocation for the 2022-23 financial year in procuring over 8,500 metric tonnes (MT) of maize for reserve.
NFRA acting Chief Executive Officer David Kaputa Loga said the agency has 55,000 metric tonnes (mt) of the staple food in its stock.
“We have purchased another 8,500mt from Admarc [using funds carried over from 2022- 23 [financial year]. The World Bank is also financing [procurement of] 21,000mt using an open-tendering method,” Loga said.
He, however, lamented challenges including price volatility and elevated moisture content at the beginning of the season, which affected its operations.
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Meanwhile, commentators fear that maize prices would continue rising in the short to medium terms due to low supply.
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Third round crop estimates published recently by the Ministry of Agriculture show that the Agriculture Development and Marketing Corporation (Admarc) has in its stock about 15,960mt, bringing the tally to 70,950MT.
The estimates, further, indicate that maize production has decreased to 3,509,837mt, representing 5.6 percent decline from the 2021-22 final round estimate of 3,716,479mt.
According to the World Bank, Malawi’s annual maize requirement is 3.1 million mt, which local commentators argue has grown to above 3.5 million mt in recent years.
Lilongwe University of Agriculture and Natural Resources (Luanar)-based agriculture economist Horace Phiri said the outlook remains mixed.
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“The prices are not really influenced by who has the maize but basically who is participating on the markets. So, right now, the maize is with the populous, and we are not sure whether it’s with the farmers or the traders.
“In the event that a lot of it is with the traders that are hoarding to take advantage of good prices later on in the year, then that will greatly impact the prices that we are going to observe in coming weeks and months. Unfortunately, with our small reserves and Admarc not having huge stocks, it means the government is powerless in cushioning the market,” Phiri said.
Another agriculturalist Leonard Chimwaza said the trends point to short supply of maize in the country.
“This is something we need to be worried about because of the responsibility orientation. The private sector responsibility orientation goes where there is demand, for example, if there is demand; in Zambia or Mozambique, the trader will go to that market and it becomes very difficult for the government to control what the private sector has,” Chimwaza said.
The third-round crop estimates statement indicates that the government will further procure about 42,000mt additional maize for the SGRs using the K12 billion in the National Budget, the GESD (Contingency Emergency Response Component) through Agricultural Commercialisation Project; and African Risk Capacity Insurance payout funds.
Recently, the Reserve Bank of Malawi noted that food inflation rose to an average of 38 percent in the second quarter from 31.7 percent between January and March and compared to 25.4 percent for the second quarter of 2022.
The rise in food inflation reflected the impact of high costs of farm inputs, which has been sustained by the ongoing Russia-Ukraine war. The impact of unfavourable weather conditions experienced earlier this year has exacerbated the situation.
