The cost of living in Malawi’s major towns and cities of Karonga, Mangochi, Mzuzu, Lilongwe, Blantyre and Zomba rose by 2.7 percent from MK 118, 663 ($226) in May to K121, 875 ($233) in June, and shot by a further 3.8 percent in July to K126, 457 ($, largely due to increases in maize prices
This is in sharp contrast to 2014 when the cost of the basket declined by an average of 1.7 percent in June and slightly increased by 2.6 percent in July, according to the Centre for Social Concern-CfSC Basic Needs Basket-BNB report for June 2015.
In the month of July, the price of beans went up by 15 percent while that of maize per kilogram went up by 5.8 percent and pushed up further by 0.94 percent in July such that a 50Kg of bag as of end July was selling at an average price of K6, 389 ($12) in the cities and major towns, states the report.
“In Blantyre and Mangochi the prices were as high as MK8, 000 [$15] and MK7, 500 [$14] respectively for an equivalent bag of 50kgs. Other consumer commodities such as sugar and beef have gone up by 3.7 % and 0.5% respectively,” indicates the report.
On average, the report indicates that a household in Lilongwe is required to spend K140 803 (269), Zomba K121 721 ($232), Blantyre K133 565 ($255), Mzuzu K106 963 ($204), Karonga K113 758 ($217) and Mangochi K114 437 ($218) to meet basic needs.
While the Malawi Vulnerability Assessment Committee-MVAC report estimates that 2,833,212 people will likely experience due to poor harvest of crops, particularly maize, the CfSC survey indicates that current soaring crop prices are not necessarily the direct result of poor crop harvest and scarcity.
Rather, it says a significant portion of the increases in price and volatility of essential food commodities can only be explained by the emergence of a speculative bubble and hoarding.
“The crop situation has attracted the speculators for short-term profit at the expense of people living a dignified life; thus excessive speculation is a key factor in driving up national crop prices right now, especially maize. It should therefore be efficiently stopped at both the national and very local level if we really want to prevent the food crisis from happening,” it says.
CfSC has since suggested controlling the broad direction and pace of change of all crop prices across the economy, through early opening of ADMARC, as part of measures to ensure transparency and regulation in dealing with speculation on crop commodities’ future markets.