Summary

Malawi?s summer crop harvest is almost complete, and the rainy season is essentially over. Household food security has improved; household stocks are high, and market demand and consumer prices are low. The Ministry of Agriculture and Food Security has conducted the third round agricultural production estimate survey; the results will be released mid-June. Malawi expects its second consecutive bumper harvest this season. Farmers began planting winter crops in March and April, and will continue planting until July and August. The first winter harvests begin in August and continue through December. The winter crop improves household food security at the onset of the lean months (January and February).

Food aid distributions in response to the needs identified by the 2006/07 Malawi Vulnerability Assessment Committee (MVAC) are now complete as households have food from their own production. The food aid program was extended by one month into April 2007 to prevent the need for households to consume their food crops prematurely. The food aid program was generally a success, meeting all of the identified needs. The MVAC has just finished their 2007/08 food security assessment to determine areas that may need food aid assistance this season. The results will be released soon.

ADMARC has not yet started buying maize as the private traders are now doing. However, market activity in maize has generally been low; traders fear a weak market for their produce due to the favorable household food security following the recent harvest. However, as the moisture content drops further, trade in maize is expected to increase as traders stock up to fulfill contractual obligations to the national Food Reserve Agency (NFRA) for exports to Zimbabwe and other future export contracts. This increase in maize trade activity is expected to strengthen the market, pushing up local market prices.

Seasonal timeline

FULL-SIZE IMAGE

Current food security

Household food security has improved considerably with the new harvest. The past season?s food aid distribution program to vulnerable households is now over. The program was supposed to address missing food entitlements of about 57,000 MT starting in July/August 2006 and ending in March 2007. However, due to logistical problems, the program started in October, and the missing food entitlements were revised to about 46,000 MT. The program progressed very well and was extended by a month into April so that beneficiary households would not rush to consume the maturing crop before the harvest.

Figure 1: Comparison of planned and actual food aid distributions FULL-SIZE IMAGE FEWSNET/Malawi; Source: WFP

Figure 2. Comparison of maize production, average and requirement trends FULL-SIZE IMAGE FEWSNET/Malawi; Source: MoAFS

Figure 1 compares planned and actual monthly food aid distributions. About 53,000 MT of food aid was distributed, about 15 percent more than the initially planned 46,000 MT based on the MVAC figures. This increase was, according to WFP, due to other (non-MVAC assessed) nutritional requirements in the same districts on programs for HIV/AIDS, chronically ill, supplementary feeding, therapeutic feeding and emergency school feeding.

Many households have food from their own production, reducing the level of market demand for food. The situation is compounded by the fact that this season marks the second consecutive bumper harvest, and a number of households report having food ? especially maize ? carried over from last season. The second round agricultural production estimates from the Ministry of Agriculture and Food Security put this season?s maize production at about 3.2 million metric tones, the highest on record (figure 2). Although these figures are only from the second round, the final figure may not be significantly different as there have not been any reports of events that would derail the production prospects since the figures were released in April. This figure represents a 25 percent increase over last season?s (2005/06) final maize production estimate of about 2.6 million MT. Figure 2 compares annual maize production since 1982/83, average production for the period and requirement trends. The maize requirement is for human consumption only and does not include other uses such as seed, animal feed etc and assumes that maize contributes 72.8 percent to the total energy intake. The surplus production in the last two seasons has kept market demand and prices for maize low. ADMARC has been unable to sell maize locally. The lack of domestic market for maize has forced the government to lift the export ban. The two consecutive bumper harvests have meant that some farmers and traders have had to store large amounts of maize for a long time, thereby increasing the risk of storage losses to pests, such as the Large Grain Bore (LGB) in maize. Pests can cause extensive losses to stored maize if improperly stored, and the Ministry of Agriculture and Food Security has intensified campaigns on post-harvest storage best practices. LGB infestations of maize have been reported in many areas and, if not properly controlled, can result in local losses of over 40 percent. Of particular concern are the poor households that cannot afford to buy enough pesticides.

At the national level, the concern has been how to dispose of the excess maize without putting the country at undue risk of food insecurity later in the season or in event of crop failure in the next season or two. To this end, the government has been constructing maize silos to increase the national maize storage capacity, which the government can tap into in emergencies. The storage structures are being decentralized as one way of reducing distribution complications in times of food crisis as has sometimes been the case.

Figure 3. ADMARC and district average local market maize price trends, by region from November 2006 to May 2007

Northern region FULL-SIZE IMAGE

Central region FULL-SIZE IMAGE

Southern region FULL-SIZE IMAGE

FEWSNET/Malawi; Source: MoAFS

Markets and prices

The lifting of the export ban in March appears to have resulted in a slight increase in market demand for maize and consequently a slight upswing in the average local market prices, as shown in figure 3, which shows average local market maize prices by district in all the three regions of the country. Out of the 68 markets for which comparative price data was available, about 75 percent (representing 51 markets) recorded maize price increases between April and May 2007 ranging from just above 0 percent at Dowa market in Dowa district to 52 percent at Thyolo market in Thyolo district. Only 19 percent of the markets (13 markets) registered maize price drops between April and May 2007. The decreases ranged from just above 0 percent at Chimbiya market in Dedza district to 23 percent at Balaka market in Balaka district. Three of the markets registered no change in maize prices during this period.

In general, maize prices ranged from MK8.43/kg at Balaka market in Balaka district to MK22.98/kg at Jenda market in Mzimba district. Maize prices in all the local markets continued to be below the ADMARC price of MK30.00/kg.

The lifting of the export ban has brought relief to ADMARC and other traders who were finding it difficult to find local markets for their maize. In addition to the 80,000 MT allowed exports from February to April, there has been another permit to export 400,000 MT to Zimbabwe. It is not very clear how much was exported out of the first arrangement. However, out of the 400,000 MT to be exported to Zimbabwe, the NFRA has managed to sign supply contracts with private traders of close to 240,000 MT. Out of this, about 50,000 MT had been exported to Zimbabwe by the end of May 2007.

The local market maize prices this season are also much lower than at the same time last season, due to the favorable food supply resulting from the bumper 2006 harvest and the 2007 harvest that is just coming in. Prices in most monitored markets show a significant decrease in May 2007 compared to same time in 2006, as shown in table 1. Out of the 69 monitored markets in May this year, only 57 had price data for May 2006 to allow comparison to be made. Out of these 57 markets, only 16 showed a price increase over the same time last year, while on the rest of the markets, prices were lower than at the same time last year. The markets that have registered an increase this year compared to last year are the same ones that had some of the lowest prices last year. The price increases in these markets therefore, will not limit food consumer food access.

The new crop harvests and the lifting of the export ban in maize have triggered an increase in cross-border trade, both formally and informally. Maize imports through informal cross-border trade in May 2007 amounted 7,141 MT, up by about 18 percent from 6,065 MT imported in April 2007. Some of this maize, almost all of it from Mozambique, could be re-exported. Exports of maize through informal cross-border trade on the other hand amounted to 321 MT, with about 88 percent of it destined for Zambia. The exports could probably have been higher than this but some of the traders are opting to sell their maize to the National Food Reserve Agency for export to Zimbabwe. The monitoring system captured about 4,790 MT of maize exports, of which 4,590 MT were by the NFRA to Zimbabwe and 200 MT by ADMARC to Mozambique. The export volume in May is about 5 times the amount exported in April.

Table 1. Local market maize price comparison between May 2006 and 2007 FULL-SIZE IMAGE   FEWSNET/Malawi; Source: MoAFS