10 000MT SGR maize half a loaf

It is good news that the Agricultural Development and Marketing Corporation (Admarc) is about to release 10 000 metric tonnes (MT) of maize onto the market. The maize is from the Strategic Grain Reserves (SGRs) and will be offered for sale at 600kg per 50kg bag in the produce trader’s 240 outlets across the country.

This is good news to the country as a whole because it will help suppress maize prices on the market. The commodity’s prices across the country range between K38 000 and K50 000 per 50kg bag or K760 and K1 000 per kg, respectively. These prices are obviously beyond the reach of a majority of Malawians.

The second good thing about selling the maize at the government-set price across the country is that the move will also help suppress food inflation. As part of the food component, maize has a huge weight at 45.2 percent in the consumer price index, an aggregate basket of goods and services for computing inflation. Shortage of the commodity on the market, real or perceived, hugely and swiftly pushes inflation up. The opening of Admarc’s depots for maize sales will therefore give relief to consumers; and it is expected that if sustained maize prices will accordingly fall by a considerable percentage. 

However, the flooding of the market with maize will obviously be bad news to traders or farmers who have been hoarding the grain in anticipation of selling it later at much higher prices. They will thus have no choice but to also release it on the market. What will be key though, for sustained low maize prices, is the commodity’s continued availability on the market.

The question is: what is 10 000MT of maize? How long will it last? This tonnage is 200 000 (50kg bags) of maize. According to the Ministry of Agriculture, each outlet in the Northern Region will get 75MT or 1 500 bags of 50kg each, while each outlet in the Centre and South will each get 85MT (1 700 bags of 50kg each). This gives an average of 834 bags of maize for each one of the 240 outlets across the country. But in the cities, the outlets are thinly spread. You are talking of one outlet each in Zingwangwa, Ndirande, Chilomoni, Mbayani, Bangwe, Chirimba et cetera. These are townships with huge populations. If each of the outlets will indeed get 834 bags, then that is a far cry from meeting even a quarter of the demand for the commodity in the country’s cities. You can be assured that stocks will finish the same day the outlets will open for sales. And since the sales will be rationed to 25kgs per person, it means only 1 668 people will access the maize per outlet all things being equal. Nationally, 400 000 people will buy some maize to last them roughly half a month.

Following Cyclone Freddy last year, government drew 12 640MT from the SGRs. The maize was distributed to selected outlets and finished the same day the outlets commenced sales. The current stock is 2 640MT less than what was released from the SGR last year for Freddy victims. Before drawing the 10 000MT for the current distribution by Admarc, maize stocks in the SGR managed by the National Food Reserve Agency were said to have dropped to 68 000MT which is about half the tonnage required to address hunger in the country. According to the Malawi Vulnerability Assessment Committee over 4.4 million are at risk of acute hunger this year due to maize shortage.

The take home message is that government’s move to release 10 000MT from the SGR while commendable, is only half a loaf. Government still has to find maize to feed the 4.4 million at risk of acute hunger this year. The more plausible way forward is the suggestion by captains in the grain trading industry such as the Grain Traders Association that with the ban on private traders on maize imports, government should take up the challenge of importing maize. The good news is that with elections looming in the horizon, government will, for sure, do the needful.