Malawi stands to benefit from some positive shifts in global commodity prices, but risks persist as international markets remain volatile, a new report by the Export Development Fund (EDF) shows.
According to the Research Insights on Global Commodity Prices released this month, surging gold prices have strengthened Malawi’s foreign exchange reserves and offer improved earnings for small-scale miners.
Forest in Mangochi . | Nation
At the same time, falling global energy prices could provide short-term relief to inflation and production costs, though local benefits could be tempered by exchange rate fluctuations and supply challenges.
The EDF report indicates that precious metals, particularly gold, have seen a substantial price rise of about 20 percent since January 2025. This trend is already contributing to an improved foreign reserves position at the Reserve Bank of Malawi (RBM) and creating opportunities to boost export earnings through formalised mining.
“Higher gold prices present a valuable opportunity for Malawi to strengthen its foreign exchange position,” the report says. “However, there remains a need to formalise artisanal and small-scale mining to mitigate risks such as smuggling and ensure that miners capture fair value.”
By holding gold, central banks can protect their purchasing power against inflation, which can erode the value of fiat currencies over time.
In an earlier interview, Maleta Gems and Jewels founder and executive director Percy Maleta hailed the central bank for investing in the gold reserves.
“The monetary gains are obvious,” he said in a telephone interview. “The gold that they bought at around K60 000 is selling at close to K140 000. So, this is a substantial gain for them in the short-term, but it is more beneficial for them to hold it as a way of shoring up their forex reserves for the long-term.”
Malawi is also benefiting from a decline in global energy prices, with the EDF noting a 19 percent fall in the energy price index since January. This is expected to ease transport and production costs domestically, helping contain inflationary pressures. However, the report cautions that the extent of relief will depend on the stability of fuel supply chains and the exchange rate environment.
Agricultural exports present a mixed picture. Global Arabica coffee prices have strengthened significantly in recent months, offering an opportunity for Malawi’s coffee producers to secure better earnings in premium markets. Conversely, tea exports continue to underperform. The EDF report shows that Malawi’s black tea, sold largely through the Mombasa auction, fetches consistently lower prices than teas sold in Colombo and Kolkata, raising competitiveness concerns.
“The gap between Mombasa auction prices and those in Colombo and Kolkata points to the need for Malawi to improve tea quality, secure better certifications, and diversify market access,” the report advises.
Groundnut farmers face a tougher outlook. The EDF highlights a sustained decline in global groundnut prices, posing risks to rural incomes. It calls for increased investment in processing and value addition to help farmers earn better margins and reduce vulnerability to raw commodity market swings.
