Economists caution on maize imports

Economists have cautioned government to tread carefully on the decision to import maize, saying the move could cost the country more than buying locally.

The sentiments were expressed by Economics Association of Malawi (Ecama) president Chikumbutso Kalilombe and a lecturer in the department of economics at Catholic University of Malawi (Cunima) Gilbert Kachamba, in separate interviews on Monday.

They follow Ministry of Agriculture, Irrigation and Water Development’s announcement that it has given grain traders up to November 25 to sell their maize to Agricultural Development and Marketing Corporation (Admarc) depots, failing which it will resort to importing.

But Kalilombe, in a written response, stated that if traders are not willing to supply at a given price, it means they think the demand for the commodity is higher and that there are other buyers willing to pay a higher price.

He said: “If indeed the issue is about demand and supply forces, our hope is that the cost of importing maize is equal to the cost of sourcing the maize locally.

“Otherwise as a country we will end up spending more on foreign product and in the process supporting foreign employment and production.”

On his part, Kachamba said government is justified to import if traders keep holding on to their maize with the hope of selling at higher prices.”

Government early this month revised upwards the buying price of maize from K230 to K250 per kilogramme.

Kachamba said: “Government needs to control inflation and we know that inflation makes about 52 percent of the consumer basket.”

But in a telephone interview  with The Nation on Sunday, Ministry of Agriculture, Irrigation and Water Development Principal Secretary Grey Nyandule Phiri said that suppliers have already been found.

He said they cannot give a go-ahead to the suppliers now as they want to give opportunity to local traders.