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Informal maize export up amid rising prices

Informal maize exports increased by 38 percent in August compared to the previous month and 281 percent higher than the five-year average, the Famine Early Warning Systems Network (Fewsnet) has said.

The higher exports , according to Fewsnet Malawi Food Security Outlook report covering the period between August 2022 to March 2023, are due to higher demand for maize and prices in neigbouring countries is posing a risk to the food supply in the country.

Maize contributes about 52 percent to the inflation basket

Reads the report: “The Higher demand and prices in neighbouring countries and East Africa have resulted in a significant uptick in exports, reducing local food availability, despite carryover stocks and harvest production initially indicating a net-even food supply for the 2022/23 consumption period.

The report, however, shows that Malawi is experiencing a reduction in informal maize imports.

According to the data, informal imports through s o u t h e r n M a l a w i , v i a Mozambique, and northern Malawi, via Zambia, were 23 percent below last month and 21 percent below the five-year average.

Meanwhile, FewsNet has indicated that most households face constrained access to food purchases in markets due to a typically high prices exacerbated by limited income access.

Said the Report: “Although most very poor and poor families, especially in southern Malawi, are mainly relying on market purchases for food, many of them have reduced capacity to afford adequate food due to increases of maize prices

“The drivers for price increases remain the increased market demand, especially in southern Malawi, increased transactional costs due to rise in fuel prices, general inflation due to global factors and the recent devaluation of the local currency, the kwacha and higher demand in markets across the border in Tanzania.”

Grain Traders Association of Malawi president, Grace Mijiga Mhango, in an earlier interview, observed that the supply and demand forces which are largely fuelled by the low production of the commodity and devaluation of the kwacha are some key factors fuelling prices of maize as well as informal exports.

“The devaluation of the kwacha has also created room for traders from Tanzania and neighbouring countries to opt for Malawi maize which has become cheaper in the process creating pressure on the local market. People are therefore scrambling for the little that is on the market, in the process driving up prices,” she said.

Maize, as p a r t of the Consumer Pr ice Index—a measure of price change in a basket of constant quantity and quality of goods and service— contributes about 52 percent to the inflation basket.

Meanwhile, the Malawi Vulnerabil i ty Assessment Committee (Mvac) report shows that at least 3.8 million people or 20 percent of the population in Malawi is expected to face high levels of acute food insecurity.

At 3.8 million, this is the highest number of acutely food-insecure population in the last five years compared to 3.3 million in the 2018/19 consumption year and 1.49 million in the 2021/22 consumption year.

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