- While Malawian households enter the lean season, awaiting the next harvest, the government is accelerating its sales from the Strategic Grain Reserve. Government sales, which include exports, have not managed to curb the maize price hike at local markets.
The increase in the maize sales is due to a number of factors, according to the latest Malawi report of the US agency Famine Early Warning Systems (FEWS).
The principal reason is that the demand for maize has increased as the number of households running out food from their own production increases during the consumption season. Most of these households are net buyers of maize, and depend on the large agricultural marketing parastatal, ADMARC, as their main market.
As the parastatal sells maize at subsidised prices, some of the ADMARC officials are even reported ration the maize sales to ensure that as many people as possible have access to the maize.
However, also exports of the government commercial maize had increased from 25,414 metric tons at the end of October to 45,914 tons by end of first week of December, up by 80 percent, FEWS reports. The Malawian government tendered for the export of 100,000 tons of maize as one way of boosting the maize sales which were very low at the time and raising concerns among stakeholders as to how the maize stocks would be disposed.
In total, out of the 251,000 metric tons of government maize for sale, 206,385 tons had been sold by the end of first week of December, leaving a balance of 44,615 tons. The current level of total sales represents a 32 percent increase over the cumulative sales attained by the end of October.
According to FEWS, the increase in maize sales has reduced the balance of the government commercial maize stocks from 94,545 tons at the end of October, to 44,615 tons by the end of the first week of December. "If all the confirmed pledges to buy the maize were fulfilled, all government commercial maize stocks will be sold by the end of the season," the agency warns.
Although ADMARC had made substantial maize sales during the last months, prices on local markets have been observed to grow since August 2003. "Although the prices have increased, they remain generally lower than at the same time in the last two years," FEWS however concludes.
The agency warns that a sustainable supply of maize in the ADMARC markets would play a crucial low in ensuring stability in the local market prices in the coming months. "Otherwise, the 2001/02 scenario, where prices reached unprecedented high levels around January/February, could be repeated," FEWS concluded.
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