There is increased discontent among pigeon pea farmers and traders in Malawi following a drop in prices for the crop over the past four to five months.
Last week, the African Institute of Corporate Citizenship (Aicc) organised a meeting in Blantyre to discuss prices for pigeon peas in the country.
The price of the legume, which started at above K500 per kilogramme at the beginning of the season, is now at around K350 in some parts of the country after dropping to as low as K200 per kg a few weeks ago.
By the end of the year 2015, the price averaged K595 per kg and the opening prices for this year were largely influenced by last year’s record-high prices as traders speculated on the crop.
However, several factors have led to suppressed lower prices for the crop, especially in India – which is the largest importer of pigeon peas in the world, and this has led to lower than expected prices for pigeon peas in Malawi and other countries.
Although the prices are expected to improve slightly by November and December this year, experts who spoke at the Aicc meeting in Blantyre indicated that they are unlikely to reach last year’s levels which they believe were abnormal and not a good yardstick for prices of the crop.
This is because unlike in 2015 when India experienced a drought which led to reduced production of the crop among its farmers, things have returned to normality this year as the country experienced normal rains, which led to normal harvests for the crop.
The experts explained that although this year’s prices may be perceived as low when compared to last year’s, they are actually normal and should be basis for making decisions on the crop.
Prior to the extraordinary pigeon pea year of 2015, the price of the crop was recorded at between K130 and K360 per kg in 2014 and between K90 and K160 in 2013.
Considering the abnormal factors that led to the sharp increase in prices for the crop last year, this year’s price can indeed be considered normal and not far from those that prevailed before 2015.
One thing that was emphasised during the Aicc meeting was that demand for pigeon peas remain high on the international market and that the crop will continue to be important for Malawi. Farmers are encouraged to continue growing the crop in large quantities to enable Malawi to benefit from the favourable factors on the international market.
Although Malawi is a major producer of pigeon peas in Africa, the country contributes just one percent of total pigeon peas traded globally. This means that Malawi has little influence on the crop and can produce as much as it can, without having an effect on world prices for the crop.
In any case, Malawi can only start attracting big buyers and better prices if it started producing significant quantities as off-takers prefer sourcing all their requirements from a single or fewer sources to cut costs.
Malawi, therefore, has an opportunity to increase production of pigeon peas substantially without really increasing supply to levels that can suppress international prices.
Aicc Chief Executive Officer, Felix Lombe, told the meeting in Blantyre that pigeon peas remain the largest crop among the list identified by the Malawi Government in the National Export Strategy as alternatives to tobacco that have shown potential for success.
He observed that several institutions have also been established to support production of the crop and these include the farmers’ association, support non-governmental organisations, businesses buying the crop from farmers, processors, export companies as well as commodity exchanges that are facilitating trading and export of the crop.
This, he said, makes pigeon peas a crop that should be nurtured by Malawi as earnings from tobacco continue to dwindle.
Malawi and India are currently negotiating a memorandum of understanding where Malawi will supply pigeon peas to India. If this is passed, Malawi will have to increase production and both smallholder and commercial production will have to be expanded.
However, this will depend on how farmers will be sensitised with regards to availability of markets and prices that may prevail during harvest time.
It should be noted that with strides being undertaken in competing countries such as Mozambique and Tanzania, Malawi risk falling back and lose the market share in pigeon peas market due to poor quality crops, high transactions costs and slow transition to structured market system for grain legumes.
The future success of pigeon peas for Malawi is therefore subject to how quickly Malawi can move to eliminate these challenges
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