August 10, 2004

Maize prices continue to climb following poor harvest

Maize is being sold at twice its normal price in parts of southern Malawi after a sharp drop in crop production, aid workers have complained. "Maize is normally available at 10 kwachas (almost 10 US cents) a kilo at this time of the year, but we have received reports of it being sold at 20 kwachas (about 20 US cents) a kilo," said Famine Early Warning System Network (FEWS-NET) country director, Sam Chimwaza. A Malawian living in the southern region, one of the poorest parts of the country, earns about 10,000 kwachas (US$ 94) a year.
The National Statistics Office estimated maize production at 1.7 million mt, down by 13 percent from last season. Maize is consumed even in areas where cassava and rice are considered a staple food. An inflation rate of 11.6 percent in June, up by 0.3 points from May, had also eroded the purchasing power of households, who already had trouble covering basic needs. Inadequate rainfall, especially in the south, was one of the reasons for the drop in maize production. According to the latest FEWS-NET report, the government is purchasing 60.000 mt to replenish the Strategic Grain Reserve and procuring an additional 70.000 mt for sale to the public, with food aid needed to plug the deficit. A Food and Agriculture Organisation/World Food Programme Crop and Food Supply Assessment report estimated that Malawi would need 56.000 mt of food aid. However, the FEW-NET report suggested that the price of maize "is drifting towards the worst-case scenario presented in the last VAC [Vulnerability Assessment Committee] analysis report, and that the food aid needs will be closer to the upper range of 83.500 mt rather than 56.000 mt".

Most of the maize in southern region markets originates from farmers in Mozambique. Preliminary findings from a newly instituted informal cross-border monitoring system, which became effective at the beginning of this month, showed that the country has been informally importing about 1.500 mt to 2.500 mt of maize every week, mostly from Mozambique. (IRIN)

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