| MALAWI Food Security Update |
January 2007 |
Household food security remains favorable, even during the peak of the hunger season. Food is readily available in markets, and many households still have stocks from last season's bumper harvest. Maize prices are lower than normal for the season, and poor households have sufficient access to food through the markets or through food aid interventions being implemented in localized food-insecure areas. Prices in many markets are also decreasing unseasonably, as many traders unload stocks they were holding in anticipation of higher prices during the hunger season and demand for maize has been low. With another bumper harvest expected this year, prices may drop even further. The current maize export ban is limiting traders’ market access and keeping prices low, which may cause a significant slump in prices after the upcoming harvest.
El Niño conditions continue to weaken, and the good rainfall so far this season is expected to continue. Some areas received incessant rains for most of January, which has increased the risk of water logging, nutrient leeching and flooding, all of which could negatively impact the current good production prospects. If moderate rainfall continues in February, though, a good crop harvest is likely in the coming season.
Seasonal timeline
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Agro-meteorological situation
Cumulative rainfall from October 2006 through January 31, 2007 has been normal to above-normal throughout Malawi (Figure 1). Most areas also experienced above-normal decadal rainfall in the last dekad of January, with good spatial and temporal distribution. In many central and northern districts, however, heavy and sometimes incessant rains are threatening the good production prospects. If incessant rains continue in February, some areas might suffer water logging and nutrient leeching, and the risk of floods will increase. Incessant rains have already raised concern in Mzimba and Chitipa districts in the north, Dedza, Ntcheu, Mchinji, Ntchisi and Kasungu districts in the central region and Zomba, Thyolo and Blantyre districts in the south.
Despite concerns over heavy rains, overall seasonal prospects indicate an above-average production. El Niño Southern Oscillation (ENSO)-neutral conditions are expected to return in the months ahead, as forecasts suggest that El Niño conditions are weakening, and normal rains are likely throughout Malawi for the remainder of the season. However, since El Niño conditions have sometimes caused an extended dry spell in the second half of the growing season, from January to March, following good rainfall early in the season, there is still a risk of deficient end-of-season rainfall. A prolonged dry spell now could adversely affect production, as crops still need adequate moisture for another month to mature. An early end of the rains could have a particularly negative impact on crop production in parts of Nsanje and Chikwawa districts, given the late and erratic onset of rains.
The general crop stand in the field is good, with the maize crop ranging from vegetative to tasseling and cobbing stages, and no major incidences of pests or diseases have been reported. Agricultural casual labor, ganyu, is still readily available as a means of earning income for households that have run out of own-produced food. As not many people are seeking ganyu, the supply is low and wage rates are higher than normal, which benefits the food security of workers’ households as they are able to earn enough to meet their food needs.
| Figure 1. Dekadal and cumulative rainfall, as percentage of normal | |
| Map 1: January 21 to 31, 2007 | Map 2: October 1, 2006 to January 31, 2007 |
| Source: Meteorological Department | |
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Markets and prices
Figure
2. ADMARC and local market maize prices, by region Northern region Central region Southern region Source: MoAFS, FEWS NET/Malawi
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Local-market maize prices in January ranged from MK11.04/kg at Ntchisi market in Ntchisi district to MK38.46/kg at Chilumba market in Karonga district. ADMARC markets continue to peg their maize price at MK30.00/kg, which is higher than maize prices in almost all local markets (see Figure 2) and 2 to 3 times higher than many local market prices at the same time last year (see Figure 3).
Maize prices are much lower than at the same time last season, due to the favorable food supply resulting from the bumper 2006 harvest. Prices in most monitored markets are currently more than 50 percent lower than in 2006, and prices in all monitored markets are below the 2006 prices with the exception of Misuku market in Chitipa district and Chilumba market in Karonga district (Figure 3).
In addition to being significantly below 2006 levels, prices in many markets decreased from December to January. Prices normally increase at this time of year as the hunger season progresses, but the abundant food supply is driving prices down. Out of the 62 markets for which comparable data were available, more than half of the markets registered price decreases, 24 percent registered no change and the remaining 24 percent registered price increases. These trends are the opposite of the price trends last season (Figure 4).
ADMARC has not been able to sell maize, as its maize price is higher than local-market prices throughout the country. Some ADMARC markets have sold literally no maize since the start of the marketing season. There is a general decrease in market demand for maize compared to last season due to the favorable household food security situation, as many households still have food from their own production last season.
The low market demand for maize is also affecting traders, who have maintained grain stocks to sell at this time when prices are normally high. These traders now realize that maize prices will not rise to the anticipated levels and that production prospects suggest a bumper harvest that may result in a slump in maize prices in the coming months, and they are now releasing their maize on the market as a result. The risk of crop losses due to pest attacks, rising storage costs and limited storage space for the coming harvest are also encouraging traders and farmers to offload their maize stocks, exerting further downward pressure on the maize prices.
This situation is exacerbated by the current maize export ban. Private traders have asked the government to consider lifting the ban, but the government has indicated that it has no immediate plans to do so—likely to prevent a situation in which the country has a surplus now and in the next season is importing maize, as was the case in 2001. If the export ban is not lifted, prices may decrease even more substantially if the outcome of the current harvest is favorable. It would therefore be advisable for the government to revisit the export ban in the near future once it is certain of this year’s harvest outcome. Additionally, Zambia and Tanzania are experiencing good rains and looking forward to bumper yields, which will increase competition on the regional maize export market after the harvest, especially if these two countries remove their existing export bans before the harvest.
At the livelihood zone level, further analysis of the price data shows that all the livelihood zones are in line with the MVAC scenario used to determine the number of households and amount of food aid required this season. This represents an improvement for the Western Rumphi livelihood zone, which in the past two months went beyond the MVAC-projected price scenario, implying a worse situation than was initially projected. The improvement in the situation may be a result of increased food aid interventions, as the interventions are scaled up before the harvest time. According to the WFP Humanitarian Food Security Update, WFP has distributed a total of 29,192 MT of various food commodities since October 2006, meeting 100 percent of the MVAC-estimated missing food entitlements in the targeted areas. Of this amount, 4,240 MT was distributed in October 2006, 7,490 MT in November, 8,618 MT in December and 8,862 MT in January 2007. Central Karonga livelihood zone has been close to the projected scenario border line for most part of the season.
| Figure 3. Local market maize price comparison between January 2006 and 2007
Source: MoAFS, FEWS NET/Malawi |
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| Figure 4. Percentage of markets by monthly price change, 2005/06 and 2006/07 seasons | |
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2005/06 |
2006/07 |
| Source: MoAFS, FEWS NET/Malawi | |
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Maize Imports and Exports
Maize imports through informal cross-border trade decreased slightly from 3,938 MT in December to 3,825 MT in January. This brings this season’s cumulative maize imports since April 1, 2006 through informal cross-border trade to 74,568 MT, mostly from Mozambique. This is about 42 percent lower than the 128,403 MT imported during the same period last season.
| Figure 5. Informal maize imports trends by source in 2005/06 and 2006/07 seasons
Source: FEWS NET/Malawi |
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