Firm faults APM’s new maize price
Investment and portfolio management firm has described the recent 127 percent maize increase by State owned Agricultural Development and marketing Corporation (Admarc) to be out of reach for most Malawians.
The grain has been pegged at K250 per kilogramme (kg) which translates to K12 500 per 50kg bag from K110 per kg or K5 500 per 50kg bag.
Blantyre-based Alliance Capital Limited said in its weekly market update the fact that the country is going through the worst food crisis in eight years bears evidence that people cannot afford to buy at more than double the price.
President Peter Mutharika last Friday announced the new maize price at the Kamuzu Palace in Lilongwe when he held a press briefing on his return from United States of America (USA).
Mutharika said: “I have instructed that Admarc should be selling the maize at K250 per kilogramme, the same price they were buying,”
The maize price increase is probably a response to the International Monetary Fund (IMF) advice in the September review mission report that urged government to be careful on the subsidising maize in the country.
The IMF report warned: “Maize subsidies, should they arise, would need to be carefully targeted to the most vulnerable segments of the population and managed in a cost-effective way that does not strain public finances further and worsen public debt, which has now risen from 40 percent of gross domestic product (GDP) in 2012 to 58 percent of GDP in 2016.”
But the portfolio managers argue that not only is the price prohibitive but it will also set a very high benchmark for all maize prices in the food market.
Reads in part the Capital Alliance update: “A snap survey carried out on the day of the opening of the markets showed that there were no queues or people scrambling for maize at the markets.
“This may indicate one or two things; that either people have enough food in their homes, hence, the apparently low demand or they just cannot afford to buy at that price.”
Malawi is reeling from the combined effects of floods and drought that the country experienced last year, which resulted in a maize production fall of 30 percent resulting in maize shortage never experienced in 10 years.
It is estimated that 6.5 million people are food insecure and will need food assistance this year and next year. n
