Competition body says maize price cannot be controlled

While people continue digging deeper into their pockets to buy maize, the Competition and Fair Trading Commission (CFTC) has said the grain’s soaring prices cannot be controlled because Malawi has a liberalised market system.

Under this system, government relaxes restrictions and players are free to set prices for their products.

Responding to an emailed questionnaire on maize pricing, CFTC’s executive director Charlotte Malonda said neither the CFTC nor any other body is mandated to regulate or control prices under this system.

However, Malonda said excessive pricing is a form of unconscionable conduct and is prohibited under the Competition and Fair Trading Act.

“Under Section 43 of the Competition and Fair Trading Act, it is an offence for any trader to engage in unconscionable conduct in the supply of goods and services,” she explained.

But Consumers Association of Malawi (Cama) executive director John Kapito argued that government can control the prices of maize as it does with prices for other commodities such as fuel, water and electricity.

“Maize is the country’s staple food and even in a liberalised market, government can come in to protect its people,” suggested Kapito.

The Competition and Fair Trading Commission is mandated to ensure that the market functions efficiently for the benefit of consumers.

In pursuit of this mandate, from 11-19th February 2016, officials from the commission conducted a market inspection on the supply of maize in 14 districts of Mzimba, NkhataBay, Kasungu, Lilongwe, Dowa, Mchinji, Ntcheu, Balaka, Mangochi, Machinga, Zomba, Mwanza, Blantyre and Thyolo.

Said Malonda: “Overall, it was noted that there was a lot of maize in the hands of private traders selling between K240 per kilogramme to MK300 per kilogramme. “Most ADMARC depots reported receiving weekly supplies ranging from 100 to 300 bags of maize per week which was selling at MK110 per kilogramme.”

Early last year, the Femine Early Warning System Network (Fewsnet) released a report which predicted a rise in maize prices by 10 percent.

According to the report, additional food needs for households affected by hunger had put a strain on the national food stock levels and constitute the increase in prices due to limited supply.