Hunger-stricken Malawi pushes East Africa maize prices to record high

 

The price of maize flour in the region has been on the rise recently, with farmers making huge gains, thanks to hunger-stricken Malawi. PHOTO | FILE 

By ALLAN OLINGO

Posted  Sunday, April 17   2016 at  09:15

In Summary

• Kenyan and Ugandan farmers have stopped selling their produce to the local market to cash in on Malawian demand that had requested Tanzania to plug a deficit, forcing the latter to seek more supplies from other East African Community partners.
• Malawi has requested Tanzania to supply 50,000 tonnes of maize in the next three months to fight the severe hunger, sending the prices in Tanzania to an all-time high of $47.6 per a 90-kilogramme bag.
• Maize prices in Malawi have shot to a high of $55 per 90 kilogramme bag, as the nation scrambles to feed its more than 2.4 million people who are facing starvation.

The price of maize flour in the region has been on the rise recently, with farmers making huge gains, thanks to hunger-stricken Malawi.

Farmers in East Africa have chosen to hoard their produce, instead selling it to the attractive Tanzanian market, which is in turn pushing the produce to Malawi, whose citizens are staring at starvation that has seen the country declare a state of emergency.

Malawi has requested Tanzania to supply 50,000 tonnes of maize in the next three months to fight the severe hunger, sending the prices in Tanzania to an all-time high of $47.6 per a 90-kilogramme bag.

The benefit of high prices have spilled into Kenyan and Ugandan where farmers sold close to 10,000 tonnes to Tanzania since the start of the year.

Maize prices in Malawi have shot to a high of $55 per 90 kilogramme bag, as the nation scrambles to feed its more than 2.4 million people who are facing starvation.

Data from the Regional Agricultural Trade Intelligence Network (Ratin) shows that since the start of the year, Uganda has sold 6,290 tonnes of maize to Tanzania, with Kenya selling 3,123 metric tonnes, earning farmers from the two countries more than $5 million, at the current average price of $532 per tonne.

The data shows that most of the Ugandan exports were concentrated in January and early February, while Kenya’s imports have been concentrated in the past one month.

The market data indicates that Tanzania has received three batches of more than 825 metric tonnes of maize imports through the Isebania border this month alone.

On Thursday last week, Malawi President Peter Mutharika declared a state of emergency over the worsening food shortages caused by a severe drought that has seen the country’s maize production drop by 12 per cent.

“Following prolonged dry spells during the 2015/16 agriculture season and with the increased maize deficit, the country is facing a shortage of about one million tonnes of maize needed to feed the population,” President Mutharika said.

READ: Malawi declares national disaster after drought as food shortage looms

An official at the East African Grain Council, said Tanzania is experiencing a shortage of maize and is looking up to Kenya and its regional neighbours to plug the deficit.

“We expect this shortage to start cooling off in June when the harvests will be ready. Currently, Dar es salaam is the biggest market for Kenyan maize due to the attractive prices,” the official said.

Rwanda has also upped its maize imports from Uganda, buying 11,805 metric tonnes from Uganda since the start of the year.

 

Dr Alfha Kadri, the manager at the East African Commodity Exchange (EAX), said maize prices have gone up by close to 80 per cent due to the shortage. Despite the country producing a projected 908,772 metric tonnes, only 270,000 tonnes are likely to reach the market.

“We expect that half of the maize produced will be consumed by the growers, while a good percentage is expected to get spoilt due to poor post-harvest handling. Some will be sold on the informal market while some is expected to be sold across the borders,” said Dr Kadri.

READ: EAX opens in Kenya’s Rift Valley

The flow of maize out of the region and in particular Kenya is coming at a time when maize millers are concerned over shortage of supplies. Already, the price of a two kilogrammes of maize pack of flour has increased by $0.05 across the country.

On Wednesday, Kenyan millers warned that the price of maize flour would increase further for coming weeks following a grain shortage despite Kenya having imported from Uganda more than 1,500 metric tonnes since the start of the year.

“The supplies of maize have been tight in the market and our member are struggling to get enough stocks. At the moment, we have mopped up our stocks but supply from farmers has not been forthcoming. If this situation isn’t corrected then we should expect to see the price of flour go up in the coming weeks,” an official of the Cereal Millers Association said.

But NCPB managing director Newton Terer said he was not aware of any shortage in the market.

“The reserves are okay, so I am not aware of any shortage as claimed by the millers. On the question of the movement of maize across borders, the ministry will be better placed to give the reasons,” Mr Terer said.

NCPB was allocated $13 million in the 2015/2016 financial year that was to be used to purchase maize from farmers.
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