Food prices to keep rising—report

Consumers must brace for tough times ahead as food prices are expected to keep rising, which will affect many households’ access to food.

A Famine Early Warning Systems Network (Fewsnet) February 2023 Southern Africa update states that large crop and labour income losses in the 2021/22 production year have compounded the situation.

Reads part of the update: “While deliveries of humanitarian food assistance are currently ongoing, the scale of need exceeds available resources for the humanitarian response in several districts where at least 20 percent of the population still faces food consumption gaps.”

Food prices have been on a sharp increase prior to, and after the May 2022 25 percent devaluation of the Malawi kwacha.

The move to devalue the currency was attributed to the failure of the Reserve Bank of Malawi’s earlier interventions to improve foreign exchange liquidity challenges and its effects on the exchange rate.

According to the Fewsnet’s update, many households will not be able to buy food due to wage rates and a reduction in key sources of income.

On the other hand, the number of households in search of income from on-farm labour will be elevated due to the loss of their crops last year.

Apart from this, middle and better-off households that typically hire labour have fewer resources available to hire labour after consecutive years of below-average revenue from below-average crop production seasons.

Further reads the update: “In a typical year, labour provides up to 40 percent of the annual total income earned by very poor and poor households.”

The increase in food prices has in the previous year been a major contributing factor to a steady upward adjustment of inflation which stands at 25.4 percent.

National Statistical Office data shows that inflation, however, eased by a paltry 0.4 percent from 25.8 percent in November 2022.

The drop was attributed to minimal ease of food prices in November, months after the prices have been on a steady increase.

Consumers have since urged employers to respond positively to such occurrences to ensure they are cushioned.

In an interview on Friday, Boniface Chimalizeni, a Blantyre factory worker from Kachere Township, said he expects his employers to adjust his salary.

He said: “If my employer adjusts my salary with a good percentage as part of responding to such challenges, then I would be assured that I will not suffer much. Otherwise, it will be another tough year for me and my family.”

Chimalizeni said his employer previously gave them an increment in April despite prices of food and commodities escalating in subsequent months.

His sentiments were echoed by Mzuzu-based Maureen Banda who works as a shop assistant.

“Times are tough and with such projections, I would expect our employer to consider giving us a raise so that we should be able to fend for our families,” she said.

Likewise, a Limbe-Mangochi r oute minibus driver Jonathan Vitsitsi said such projections spell doom for poor Malawians.

Vitsitsi said there is need for deliberate policies to ensure that Malawians are cushioned against the rise in cost of living.

On her part, Lilongwe’s Area 25 resident Serah Mkandawire said there is need for people to spend within their means.

She said: “While we anticipate that things would get better, we should spend according to how much we earn to avoid getting into debt. However, this issue remains worrisome to most of us.”

Meanwhile, the Department of Disaster Management Affairs (Dodma) is distributing relief assistance to food-insecure households, a process which started in November 2022.

The relief assistance comes against the background of a Malawi Vulnerability Assessment Committee (Mvac) report which stated that 3.82 million people, representing 20 percent of Malawi’s population, would be food insecure between November 2022 and March 2023.

Consumers Association of Malawi executive director John Kapito said in an interview on Friday that government must consider Fewsnet’s projections seriously.

He said such projections are posing a threat and creating anticipation for high fertiliser prices and other farm inputs in 2023.

Kapito said: “These early warnings must be taken seriously by government to avoid panic especially considering the closure of Admarc [Agricultural Development and Marketing Corporation] which is worsening the food situation.”

Admarc was closed in August 2022 and government said this was part of redefining its operations.

Last year, year-on-year headline inflation was on the rise, moving from 12.1 percent in January to 13 percent in February, 14.1 percent in March, 15.7 percent in April, 19.1 percent in May and 23.5 percent in June.

It kept rising reaching 24.6 percent in July, 25.5 percent in August, 25.9 percent in September and 26.7 percent in October before easing to 25.8 percent in November.

Prior to the 25 percent devaluation of the Malawi kwacha, food prices were rising both locally and globally mainly due to the Russia and Ukraine war which affected food and non-food supply chains.

In a March 2022 policy brief titled ‘How Russia’s Invasion of Ukraine Will Affect the Food Security Situation in Malawi: Implications for Malawian Policy Response’, Mwapata Institute pointed out that the war will locally put upward pressure on the costs of food, fertiliser and fuel.