Malawi food prices suppress cost of living
The October average cost of living in the country’s four cities—Lilongwe, Blantyre, Mzuzu and Zomba—was suppressed by a fall in food prices including maize, a recent report indicates.
The Centre for Social Concern(CfSC) October 2013 Basic Needs Basket (BNB) indicates that the average cost of living for the four cities rose by less than one percent to K105 622 (about $264) compared to the month before.
Among the four cities, Lilongwe came out the most expensive rising by about four percent to K116 662 (about $291), while Blantyre experienced a 1.6 percent drop to K111 077 (about $277). Zomba came third overtaking Mzuzu at K100 085 (about $250) while Mzuzu’s basket dropped by five percent to K94 665 (about $236).
The BNB—a monthly review of the cost of living through surveys—further indicates that the average food basket dropped by ten percent, with Mzuzu experiencing a 14 percent drop in maize prices. Blantyre had a five percent drop, Lilongwe a three percent drop while in Zomba the price of the staple rose by six percent.
The nonfood basket rose by 1.3 percent.
Explaining the trend in an e-mail on Monday, CfSC social conditions research programme officer Alex Nkosi attributed the decline in the price of the grain to traders who hoarded it and have now released it into the market.
“In Mzuzu traders bought huge quantities of maize during the harvest period and hoarded it. The hoarding induced a scarcity of maize on the market consequently leading to price increases. Now that maize prices are favourable for profit making, the traders are slowly beginning to release the maize on the market—a development that has assisted to stabilise and or to drop the maize price,” said Nkosi.
He, however, added that generally maize is more expensive this year as compared to last year and consumers should tighten their belts because the cost of living is bound to increase as we edge closer to the lean season.
The October 2013 Famine Early Warning System Network (Fewsnet) report projected that the price of the staple will rise by 20 percent by December 2013 and 60 percent by March 2014 as compared to the September 2013 average prices. The report explains that the current drivers of high maize prices include lingering effects of last year’s localised production shocks, macro-economic instability, and high production costs.
Meanwhile the Economist Intelligence Unit (EIU) has said Malawi’s 2013 average inflation rate is forecast to rise to 26.9 percent, about six percentage points higher than last year’s, pointing to higher prices and lower real disposable incomes while the Reserve Bank of Malawi has adjusted upwards its inflation targets.
