Traders fall short of Maize export demand

Despite the Ministry of Trade partially lifting the maize export ban, grain traders are likely not to meet the demand for the staple grain on the export market, The Nation has learnt.

Grain Traders and Processors Association of Malawi had 60 000 metric tonnes (MT) at a time when government was lifting the ban in March.

But Zimbabwe, the major market for the country’s maize, needs 300 000MT, according to the Malawi Investment Trade Centre (Mitc).

In an interview on Wednesday, the association’s chairperson Grace Mijiga-Mhango said despite Zimbabwe being the definite market for Malawi maize, they are  failing to conclude transactions amid an impending import ban next month.

She said: “As grain traders, we have had several enquires but could not conclude transactions due to two main reasons, namely they do not have the capacity to pay and their prices are too low to make business sense.

“Furthermore, Zimbabwe will be effecting an import ban by next month.  So, there is little that can be pushed if by chance we had secured a market in Zimbabwe.”

Following increased staple grain’s production projections by 8.8 percent from 3.3 million MT in 2018/19 agriculture season to 3.6 million MT in the 2019/20 season, the association has been calling for a lift of the ban due to huge maize stocks, which the local market could not consume.

In the 2017/18 growing season, Malawi produced 3.4 million MT from 3.5 MT the previous year.

In the 2020/21 season, the country projects to produce 4.4 million MT of maize, 42 percent above the five-year average, according to Ministry of Agriculture first round crop production estimates.

In an interview on Tuesday, Mitc investment promotion manager Modie Chanza said that through collaboration with Malawian embassies in the region and desk research, Mitc identified Zimbabwe as the major market for the country’s maize.

She said other potential markets are South Africa and Rwanda with prices ranging from $270 (K211 000) to $350 (K273 000) per tonne.

But Chanza said “the ultimate price would depend on several factors, including cost of production and transport, quality of the maize, volume and competition”.

However, Mijiga-Mhango observed that while the ideal price for maize exports should be $220 (K172 000) per tonne, for now, South Africa remains a speculative market despite the cost of logistics being the main hindrance. 

She said Kenya and Rwanda are potential markets but their quality standards are too high for Malawi maize to qualify as aflatoxin tolerance level for both countries is five parts-per-billion (ppb) compared to Malawi’s  10ppb. 

In March, Ministry of Trade partially lifted the maize export ban to mop up last year’s stocks to create space for the anticipated more than one million metric tonnes MT surplus grain.

Rice and maize have had export restrictions to ensure food security.