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Food available as hunger season sets in

25 Jan 2007 14:34:00 GMT
Source: FEWS NET

Background

• Malawi hunger

• S. African hunger

• African hunger

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FEWS NET Monthly Report for Malawi covering the period Nov 2006 to Dec 2006.

MALAWI
Food Security Update
December 2006

ALERT STATUS:
NO ALERT
WATCH
WARNING
EMERGENCY

Summary and implications

Household food security is good, even as the hunger season sets in. Food is available as many households still have stocks from the bumper harvest last season. The winter crop is being harvested in some areas, and food aid interventions are increasing where needed. Poor households have sufficient access to food as well, as maize prices are lower than normal for the season.

Rainfall during the main planting season of October to December has been good throughout Malawi. Isolated areas have experienced below-average rainfall, and recent heavy rains in the last dekad of December caused localized flooding in parts of southern region, but overall rainfall has enabled farmers to begin planting. If good rainfall continues in January and February, a good crop harvest is likely in the coming season. However, the El Ni?o phenomenon may impact rainfall in the coming months. While the specific impact varies year to year, and many forecasting models predict that El Ni?o conditions will weaken during the next 1 to 3 months, the presence of El Ni?o conditions is still a cause of concern and uncertainty about the performance of the rains in the second half of the growing season.

Lower-than-average prices are benefiting poor households, and the Agricultural Development and Marketing Corporation (ADMARC) is not selling its maize stock as households are purchasing the cheaper maize available in local markets. This may affect ADMARC's ability to repay the loans it obtained to purchase its current supply of maize, and may affect its ability to purchase the current crop from farmers after the harvest.

Seasonal timeline

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Current hazard summary

Incessant rains in central and northern regions may cause flooding, which could cause loss of life and damage to property and gardens.

Agro-meteorological situation

Cumulative rainfall performance through December 31, mid-way through the 2006/07 planting season, has been normal to above-normal throughout most of Malawi (see Figure 1b). The planting rains began early this season, implying that crops will mature early, and if the good rains continue through February, harvest prospects will be good.

Figure 1: Rainfall as percentage of normal

10-day total, Dec 21 to 31, 2006 (1a)	3-month total, Oct 1 to Dec 31, 2006 (1b)
FULL-SIZE IMAGE	FULL-SIZE IMAGE

Source: Malawi Meteorological Department

The moderate El Ni?o that was detected in September may impact the rains in early 2007, according to the Meteorological Department. El Ni?o has historically caused an extended dry spell in the January to March months following good rainfall early in the season, although specific impacts vary year to year. If El Ni?o causes a significant decrease in rainfall during the second half of this season, households will be at risk of a below-average harvest, and rainfall should be closely monitored in January and February for significant impacts of El Ni?o.

Isolated locations ereceived below-normal rainfall over the season, including some areas in Chikwawa, Nsanje, Thyolo and Zomba districts in the southern region, Ntcheu in the central region and Nkhatabay in the northern region (see Figure 1b). Nsanje has experienced the worst rainfall, at 53 percent of normal in the first half of the season. In parts of Nsanje, the dry spell caused permanent wilting of the early planted crops, and in many affected areas some farmers will need to replant. However, rainfall has improved in these areas in early 2007.

Incessant rainfall occurred in the central and northern regions of Malawi in the last dekad of December, enhanced by the presence of Tropical Cyclone Bondo in the Mozambique Channel (Figure 1a). The heavy rains caused flash floods in some areas, particularly in Chikwawa district. Rainfall declined in southern parts of the country, especially in parts of Nsanje, Balaka and Mulanje districts. However, this decrease in rainfall did not have a significant impact on crop development, as favorable rainfall in the previous dekads deposited adequate moisture in the soil for crop development. On the contrary, the reduced rainfall activity allowed farmers to weed their fields, which is not possible when it is continuously raining heavily.

The good rains over the season have not only benefited crop production, but pastures as well. Pasture and drinking water for livestock are readily available, improving the nutritional conditions of most animals. Distress livestock sales have decreased significantly this season as a result of the favorable household food security situation, as households are not under pressure to sell their livestock in order to buy food. Another good harvest this season would provide an opportunity for poor households to restock their herds. The poor households that have run out of own-produced food would rather engage in ganyu (casual labor) to obtain cash to buy food than sell the few livestock they have. Fortunately, ganyu is readily available and wage rates are stable and reasonable, due to higher demand for labor now that good rains have allowed planting activities to expand, as well as the relatively low supply of labor due to good household food security.

Fertilizer and input availability

Fertilizer is readily available in retail outlets across the country, and farmers are able to access it easily. The majority of farmers are relying on the government-subsidized fertilizers, which are selling at a third of the market price. Fertilizer imports continue to flow into the country, the bulk of which are imported by the government for the subsidy program. The government is working to ensure the availability of fertilizer throughout the country, and so far there have been no reports of fertilizer shortages. Problems have occurred in the distribution of fertilizer coupons, however, and in some areas there has been an insufficient number of coupons for the smallholder farmers. There have also been reports of malpractice in the system, and some chiefs being arrested for allegedly selling the coupons instead of distributing them to local farmers.

A total of 11,703 MT of various types of fertilizers were imported in December, as captured by the cross-border monitoring system, bringing recorded cumulative fertilizer imports since April to about 65,000 MT. This represents a 9 percent increase over the imports recorded by the same time last season. The government imposed an export restriction on fertilizer to ensure that the subsidy program benefits the intended beneficiaries (Malawian smallholder farmers). However, the informal cross-border trade monitoring system recorded about 61 MT of fertilizer exports in December to neighboring countries, where the fertilizer is selling at MK 2,000 to MK 3,000 per bag compared to the subsidized price of MK 950 per bag in Malawi.

Markets and prices

Maize prices fell in 41 percent of monitored markets between November and December, with the highest decline of 33 percent in Nkhamenya market in the northern part of Kasungu District. The rest of the markets in the country registered no change or an increase in prices, but increases are normal at this time of year as household food stocks are depleted prior to the main harvest. The high number of markets registering price decreases at this time of year is a sign of a good food security situation, as winter crops are being harvested and food aid interventions are being scaled up to reach an increasing number of vulnerable households as the season progresses. The lower prices enable households who are dependent on the market for food at this time to purchase maize at relatively low prices. Even in areas where the local market maize prices are increasing, prices are not likely to increase significantly beyond MK30.00/kg, since most ADMARC markets are selling maize at between MK25.00/kg and MK30.00/kg. Meanwhile, ADMARC is holding large stocks of maize as households opt to buy maize on the local markets where prices are lower than in ADMARC markets.

Of the 62 markets monitored in December, only 13 registered maize prices above the minimum ADMARC maize price of MK25.00/kg. Appendix 2 shows the average local market maize prices for December. The current low prices are good for household food security, as poor households are able to buy maize at reasonable prices, but are not adversely affecting producer households, as prices are still at reasonable levels. These low prices are especially important at this time, which generally marks the beginning of the hunger period that spans from December to February. In this period, maize prices normally increase rapidly, especially when ADMARC does not have enough stocks, but this season, prices have generally been stable (see Appendix 1). The current situation is mainly attributed to last season's bumper harvest, because households still have food from their own production from the last harvest. This has reduced market demand for maize and consequently prices have remained relatively low and stable for this time of year. Failure by ADMARC to sell its maize is a matter of concern as it may make it difficult for ADMARC to repay the loan they obtained to buy the maize. In addition, when the current crop is harvested, ADMARC will be under pressure to buy the new crop. If ADMARC is unable to sell its current stock, it may not have adequate resources to effectively participate in the market unless the government decides to intervene.

Figure 2 shows the average maize price distribution in December 2006 at the district level. In November, the only districts with average maize prices greater than MK25.00/kg were Karonga, Rumphi and Nkhotakota. However, in December, Thyolo and Chiradzulu districts in the south also registered average prices above MK25.00/kg, likely because these districts are densely populated and landholding sizes are relatively small. Most of the land in Thyolo is occupied by tea estates. The households in these districts rarely produce enough to last them the whole season and are dependent on the market for food. Continued price increases in these areas may increase household food insecurity. Karonga district generally does not produce enough maize to feed its population and relies on maize from Chitipa and, in bad years, some imports from Tanzania. However, Karonga grows a lot of rice, which is usually sold to obtain cash which the households use to buy maize. Rumphi, the second district shaded red in the northern region was identified as one of the districts at risk of food insecurity during the MVAC assessment this year due to a prolonged dry spell that hit during the agricultural season. The southern part of the district was the worst affected, and the market maize price in this area as registered at Rumphi market reached MK31.34/kg in December. The other market in the northern part of the district, Hewe, where the crop production was generally favorable, continued to register low prices, with the average maize price for December standing at MK22.23/kg. This suggests little integration between the two markets. In the central region, Nkhotakota is the only district with a price above MK25.00/kg, which is mainly attributed to high prices recorded in Nkhotakota (MK30.33/kg) and Dwangwa (MK30.93/kg) markets in the central and northern parts of the district. There is normally a low level of market integration in Nkhotakota (however, a lack of market data from Mwansambo market in the south of the district prevents full analysis this month). Districts in which prices decreased to less than MK20.00/kg in December include Ntchisi in the central region and Zomba, Mulanje and Phalombe districts in the southern region. One possible explanation for this is the harvesting of winter crops resulting in improved food supplies and reduced market demand for maize.

Figure 2: Average maize prices by district ? Dec 2006

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Source: MoAFS, FEWSNET/Malawi

The number of markets and price variations are important to consider when reviewing district-level average prices. Figure 3 shows the number of markets and maize price variation by district. The issue of market integration is complex, but an analysis of the number of markets per district and the difference between the lowest and highest maize price in each district provides a proxy of how integrated the markets are within the district. The more markets and the smaller the maximum maize price difference is in a particular district, the higher the level of market integration, and vice versa (moving to the right in the graph, markets become less integrated). This analysis does not apply where there is only one market, as is the case with the first seven districts in the graph. The results of this analysis are illustrative, as the small number of markets per district limits the statistical significance. As shown in the graph, most of the districts have only two markets for which price data was available.

Figure 3: Number of markets and maximum maize price difference in each district

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Source: MoAFS, FEWSNET/Malawi

The level of price variation within Kasungu district reflects a significant lack of market integration. Local market maize prices range from MK17.00/kg at Nkhamenya market in northern Kasungu to MK27.42/kg at Kasungu market in central Kasungu district. The Kasungu market is surrounded by the area that was the worst affected by the dry spells last season that resulted in crop failure and left many people at risk of food insecurity. The high price at Kasungu market therefore results from high market demand for maize and little integration between the Nkhamenya and Kasungu markets.

In Dowa District, Madisi market registered an average price of MK20.33/kg while Mponela market in the same district registered a price of MK29.25/kg. In Mzimba District the lowest maize price of MK17.78/kg was registered at Mzimba market while the highest price of MK25.76/kg was registered at Mzuzu market. In Mangochi Distrct, maize prices ranged from MK17.73/kg at Namwera market to MK23.88/kg at Monkey Bay market. Some of these markets with relatively high maize prices also appear to be experiencing a rising price trend, which would negatively impact household food security. Figure 4 shows the local market maize price trends in these markets.

Figure 4: Average maize price trends in selected local markets

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Source: MoAFS, FEWSNET/Malawi

Maize prices in Western Rumphi continue to be above the prices from the MVAC scenario, which suggests a tight food security situation in the area that requires close monitoring. Appendix 1 shows the average maize price trends in relation to the MVAC scenario. Southern Rumphi was identified by the VAC to be at risk of food insecurity. The northern part was relatively better off, but as demonstrated above, there is very little market integration between Hewe market in the northern part of the district, where maize prices are relatively low, and Rumphi market in the south.

Maize imports and exports

Maize imports from informal cross-border trade fell from 6,161 MT in November to 3,938 MT in November, a decline of 36 percent. This brings cumulative maize imports through informal cross-border trade to 70,643 MT, almost all from Mozambique. This is about 34 percent lower than the 107,836 MT imported over the same period last season. The big difference between this and last season is the almost non-existence of imports from Tanzania. Between April and December 2005, about 61 percent of maize imports came from Mozambique and 39 percent from Tanzania. This year 99 percent of maize imports is from Mozambique and the remaining 1 percent from Zambia. The trend of imports from Mozambique has remained almost the same as the trend last season, while imports from Tanzania have almost disappeared. Figure 5 shows a comparison of the maize import trends through informal cross-border trade between this season and last season. One of the major contributing factors to the drop in imports is the favorable food security situation in the country as a result of last season's bumper harvest. This has resulted in relatively low prices compared to the same time last season, as shown in Figure 6. This has also translated into low domestic maize prices in most local markets in the country. The areas of high maize demand are in the urban centers of the central and southern regions, and the prevailing prices in these areas would make it economically unviable to import maize from Tanzania as the imported maize at the Songwe border is already selling at close to MK20.00/kg (Figure 6).

Figure 5: Informal maize import trends by source in 2005/06 and 2006/07 seasons

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Source: FEWS NET/Malawi

Figure 6: Prices at selected borders in 2005/06 and 2006/07 seasons

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Source: FEWS NET/Malawi

Appendices

Appendix 1: Comparison of current local market maize price trends and projected prices under the MVAC analysis

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Note: Data not presented for the Phirilongwe, Rift Valley, Nkhatabay Cassava, Misuku and Northern Karonga livelihood zones due to inadequate information.

Appendix 2: Maize prices in local markets, December 2006

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Source: Ministry of Agriculture and Food Security

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Last updated:Thu Jan 25 19:38:26 2007