Malawi’s strategic grain reserves (SGRs) are failing to effectively smooth maize price fluctuations due to several factors, including ill -timing of market interventions, regional markets behaviours and financing arrangements, a new study has indicated.
The International Food Policy Research Institute (Ifpri ) study follows recent price trends that illustrate the magnitude of the challenge, with maize prices rising from K600 per kilogramme (kg) in June 2024 to K1 700 per kg by March 2025, pressuring consumers and creating uncertainty for farmers, traders and policymakers.
The study titled ‘Can strategic grain reserves stabilise maize prices in Malawi?’ established that the extent to which SGRs can improve prices is limited by several factors in Malawi’s perspectives.
Among others, the study outlines SGR storage capacity, financing arrangements, the timing of market interventions, influence of regional maize market and the seasonal production and consumption patterns.
Reads the study in part: “Many farmers sell a large share of their production during harvesting period to meet immediate cash needs, including repayment of production costs and household expenses while they also consume maize that they grew.
“As the year progresses and household stocks decline, market supply tightens, demand increases and prices rise.”
Lilongwe University of Agriculture and Natural Resources agricultural economist Horace Phiri said in an interview on Wednesday that the study reaffirms a long-held view that the government will benefit from reducing seasonal price fluctuations.
He urged government to be more strategic to ensure that the National Food Reserve Agency (NFRA) and Agricultural Development and Marketing Corporation (Admarc) are used more effectively.
In a separate interview on Wednesday, agriculture policy development expert Tamani Nkhono Mvula said government is limited with how it can intervene in the market to stabilise prices outside of using its agencies such as Admarc and NFRA.
The study further observed that regional market integration adds another layer of complexity as Malawi’s maize market is closely connected to those of neighbouring countries through both formal and informal cross-border trade.
Reads the study: “When domestic prices rise above the cost of importing maize, traders bring grain into the country. Conversely, when prices fall below export parity levels, maize flows out to regional markets where prices are higher.”
The study highlights that such swings underscore the need to better understand the drivers of price volatility and the effectiveness of policy tools designed to address it despite the country having SGRs which are designed to store the grain.
While the study noted that grain reserves remain an important tool for ensuring national food security, especially during production shocks, droughts, or humanitarian crises, it said that stabilising maize prices requires a combination of policy approaches rather than reliance on a single intervention.
