Milk price (the price at which processors buy from dairy farmers) has increased by 42 percent since April from K490 to K700 per litre as the industry is catching up to the K800 minimum government set price.
According to the Malawi Milk Producers Association (MMPA) market trend, the price which was at K490 in April rose to K590 by May end and was increased again to K700 per litre by end of July with an indication of a further increase by October.
But industry players said the price jump is not linked to the recent imports restrictions, as the ban was only on fresh milk which was already not being imported because of its nature, and only Ultra High Temperature (UHT) milk is the one that usually flows into Malawi.
In an interview, MMPA national director Herbert Chagona, while describing the price trend as impressive, attributed it to processors desperation to catch up with the government set minimum price of K800 per litre.
Chagona said: “It is good news that the price has been rising significantly this year compared with the previous years and we are hopeful that by October, it will reach the K800 farm gate price that was set by government.
“This is because the processors earlier said since their industry is not seasonal it’s difficult to instantly start buying at the set price, opting for a gradual price adjustment, more so considering that it was the first time to set farm gate prices for the dairy industry.”
Meanwhile, Chagona has said the price improvement is, therefore, not linked to recent imports ban, because the imported UHT milk which supplements local dairy industry was not affected by the ban hence leaving demand and supply constant.
In a separate interview, Central Region Milk Producers Association chairperson, Jessie Lunguzi, said although the price has increased it is still below the cost of production describing it as the major challenge of the sector.
She said: “Currently, the major challenge is the cost of milk because it is below the cost of production, we believe that the price should be not less than K1 000 per litre.
“Another challenge is that although statistics show that we have received many cows from donor partners, when we go in the bulking groups, we find that many farmers are just selling the cows willy-nilly.”
In a separate interview, Malawi Dairy Industries (MDI) director Bob Dzombe said processors are respecting the farm gate price, but it was on the higher side considering the dairy industry’s consumer behaviours.
“Yes, we have been increasing the price but it will all depend on how the market responds. If all goes well, processors will even surpass the farm gate price but if it’s not like that, the prices may be affected.
“Yes, farmers consider the cost of feed for their livestock but people forget that processors also import additives and that is forex, so the idea of farm gate price is not good for this industry,” he said.
In an earlier interview, Shire Highlands Milk Producers Association chairperson Saini Kapito said dairy farmers in the country have the potential to produce high volumes of milk if motivated by better prices.
Said Kapito: “The association has over 14 000 farmers and produces 165 000 litres per day. The farm gate price will enable farmers to properly feed the cows so that they produce more milk.”
According to Malawi Milk Producers Association, the country produced 66 million litres of milk from dairy farmers in 2024 from 61 million litres in 2023, a development that shows significant potential if dairy cows population is increased.
It is currently estimated that the country has about 70 000 dairy cows against the industry’s demand of between 150 000 and 200 000 cows.
