Malawi’s dairy industry is still impacted by deep-seated challenges that are keeping the industry from taking off, industry players have said.
For Mzuzu’s first dairy processing plant, Udon Dairy, rising demand is failing to keep pace with supply due to milk supply challenges.
The firm, which produces Withu yoghurt and plans to go into Chambiko and milk production, said it is only processing 5 000 litres of milk per month against a potential demand of 20 000 litres.
of milk in the North. | Grace Phiri
In an interview on Friday during a Financial Inclusion Entrepreneurship Scaling (Fines) project media tour, Udon Dairy factory manager Hastings Thondoni said high raw milk prices and limited local supply in the region remain the major obstacle as the firm has successfully tackled power outage challenges by procuring a generator and cooling equipment courtesy of the World Bank-funded five-year Financial Inclusion and Entrepreneurship Scaling (Fines) project.
He said: “The problem is shortage of milk here in the North despite that it is of high quality.
“When farmers bring the milk, it is always two or three litres, but we need to increase supply beyond Nkhata Bay, Rumphi and Mzimba.”
Malawi Milk Producers Association data shows that at between K725 to K900 per litre, the current farm-gate price is below the production cost of around K890 per litre.
As of 2024, milk production on the formal market was 66 million litres, but can rise to 130 million litres annually on account of good farm-gate prices.
In an interview on Sunday, Malawi Milk Producers Association national director Herbert Chagona said the sector is marred by low and unprofitable farm-gate prices, inadequate budget support, scarcity of feed, weak extension services, shortage of an estimated 100 000 dairy animals and climate change-induced water shortages.
He said farmers are struggling to break even while the absence of a major processor in the Northern Region since 2014 has further constrained production and market access.
Said Chagona: “Farmers are not making profit from milk sales as the farm-gate price is too low for the farmers to break even.
“There is no big processor in the North since the closure of Northern Dairy Processing Company in 2014. The mini processors who have attempted to start processing milk have not been successful and most of them have left dairy farmers with huge debts to be settled.”
United Nations Food and Agriculture Organisation data shows that Malawi’s local dairy production meets only 65 percent of demand, with imports supplying the remaining 35 percent and major processors using less than half of the locally produced milk.
This is said to limit competitiveness and farmer incomes with per capita milk consumption remaining low at 8.3 litres compared to the African average of 20 litres.
To address the existing challenges, a breeding centre, liquid nitrogen plant and dairy processing centres are being proposed under a private sector-led model with the total investment pegged at $11.2 million (about K20 billion)
