Maize prices continued their upward climb in August, surging by 16 percent to reach K1 510 per kilogramme (kg or K75 500 for a 50kg bag, International Food Policy Research Institute (Ifpri) data show.
In its monthly report published yesterday, Ifpri said the increase in maize prices in August contrasts with the relative price stability observed during the same period last year when the staple grain’s price increased by a modest four percent.
During the review period, the highest price was recorded at Nsanje Boma at K75 500 per 50kg bag while Chitipa recorded relatively low prices at K1 067 per kg or 53 350 per 50kg bag.
Reads the report in part: “In August, maize remained more expensive in the Southern Region and cheapest in the Northern Region. This pattern became more pronounced as prices in the South grew at 19 percent between the last week of July and the last week of August than in the Centre and North at 13 percent over the same period of time.”
Meanwhile, Business News spot-checks in some market yesterday showed that maize prices were fetching an average of K78 000 per 50 kg bag, a development Grain Traders Association of Malawi attributed to Admarc Limite’s intention to import 200 000 metric tonnes of maize as well as National Food Reserve Agency’s (NFRA) buying of maize from farmers at an elevated price.
In an interview yesterday, the association’s president Grace Mijiga Mhango said government’s intervention has “raised unnecessary panic”.
“In such a case, market prices mirror import parity prices. Besides that, every commodity in Malawi is now being pegged against a black market dollar rate,” she said.
Last week, NFRA announced that it has increased the price it pays for maize from farmers to stop hoarding of the commodity, a move economists and traders warned may fuel inflation and worsen shortages.
NFRA chief executive officer George Macheka announced that NFRA will be paying K1 280 per kg for maize in open and mobile markets, an increase from K1 100 per kg while registered mega farmers will get K1 300 per kg, a direct response to a recent drop in maize deliveries to its depots.
In a statement signed by Admarc Limited chief executive officer Dan Makata, the State produce trader said the decision to import maize followed “careful assessment” of current stock levels, market trends, maize flow on the markets and the projected impact on household food security.
Meanwhile, Consumers Association of Malawi executive director John Kapito said looking at the trends, consumers “should expect the worst high maize prices than never before”.
“Prices of maize will remain elevated as maize traders are looking ahead of the peak period to make huge profits,” he said.
Economists have warned that any maize price surge risks exerting more inflationary pressures in an economy already exposed to election-induced spending.
