FEWS Malawi Food Security Update May 2007 - Surplus maize production keeps demand low

The ministry of Agriculture and Food Security released the third round crop estimates figures which put overall maize production at 3.44 million MT, 33.7 percent higher than the 2006 harvest. This is an historic record, and is attributed to favorable weather conditions and increased input uptake due to the government input subsidy program. Production of other crops, except tobacco, is estimated to have increased as well. This year’s bumper maize harvest has significantly improved household food security, and most households are now relying on their own production from the current harvest. This in turn has led to a significant drop in market demand for food and a drop in food prices, especially in the rural areas.

However, despite the positive picture at the national level, there are localized problem areas where people will still experience food insecurity due to chronic problems. According to the recent Malawi Vulnerability Assessment Committee (MVAC) findings, there are no significant missing food entitlements arising from hazards experienced during the growing season or based on the projected economic indicators. However, about 519,200 people across the country will need to be watched as any decline in economic conditions could reduce their entitlements below their needs.

Both private traders and ADMARC are busy buying various types of produce, including maize, from farmers. However, due to the huge surplus and the lack of significant export markets, traders are buying at lower prices from farmers, in some cases as low as MK5 to MK10/kg. The government has announced a minimum buying price of MK17/kg in order to ensure that farmers get a good return for their crop. ADMARC is expected to start buying maize in July. ADMARC’s ability to buy maize depends on government funding, and the delayed budget this year will negatively impact their financial position and consequently their ability to buy maize. This year, ADMARC will peg their purchasing price at the government sanctioned minimum price of MK17/kg instead of the MK20/kg they paid last year.

Planting of winter crops continues as more land is put under irrigation. For the Shire Valley, winter crops contribute significantly to the food requirements. Marketing of the various agricultural commodities is under way. Both tobacco and cotton, two major income sources for farmers, are fetching good prices, and this might act as an incentive for farmers to produce more of these crops in the next growing season.