Malawi losing out on legume exports

Despite being in need of forex, Malawi is losing out on legume exports through uncharted trade routes and limited production.

Reports confirmed by local experts indicate an insatiable international demand for Malawi’s pigeon peas, soya beans and ground nuts which other traders have taken advantage of.

Unfortunately, 40 percent of Malawi’s total production is being exported informally through other countries.
According to Zauba website on India import data, by 15 December 2015 India had imported pigeon peas worth US$673091760 and Malawi contributed 11 per cent.

Myanmar exported pigeon peas worth US$271,918,080 followed by Tanzania with US$164,211, 208 and Mozambique with US$120, 551, 367 while Malawi was fourth with US$74, 375, 163 (about K44 billion).

As of December 15, 2015 prices for pigeon peas in India averaged US$0.87 with much higher variations.
However experts say Malawi could rake in more money from the commodies.
Revealing to Mana, Davie Lockie, head of operations at AHL Commodities Exchange (AHCX) said all Malawi needs is to grow the legumes with a guaranteed quality and the market is waiting.

“Pigeon peas export demand is prominent and whichever route it may take from Malawi, the large proportion will find its way to India. For the export market, we can say without fear of contradiction that every quality grain that Malawi can produce will have a market outside of Malawi. Even where Malawi decides to double or quadruple its pigeon peas production, the demand can still not be satisfied,” Lockie challenged.

He however said formalizing legume markets could be key to increased forex earnings for the country.

He said, “Groundnut supply distribution is reported as 20 per cent domestic consumption, 20 per cent for local processing plants and 20 per cent is exported formally and 40 per cent is informally exported to Kenya and DRC which represents lost forex for the Malawi, which can easily be addressed by marketing through a structured market.”

“But,” he added, “Quality compromise by the informal sector as well as unchecked aflotoxin build ups have compromised the most lucrative markets for groundnuts. However, current demand stands at well above 80,000 metric tons for export market only.”

Unlike pigeon peas and ground nuts, soya beans have had a steady production which Lockie attributes to relatively high domestic demand and low cost inputs which motivate small scale producers.

“It is estimated that soya bean has aggregate domestic demand of 400,000 metric tonnes, which excludes potential export market. Export demand currently is at 100,000 metric tons,” he says.

Lockie however said despite the increased demand, supply has been very minimal due to underproduction.

“All the three legumes are on high demand, and the challenge is supply side,” he said.

It is estimated that Malawi annual pigeon peas production ranges 300,000 metric tonnes to 340,000 metric tonnes, (Crop production estimates-Minstry of Agriculture) and during 2014/15 season, 331,712Metric tonnes pigeon peas was produced, representing 4 per cent increase from previous year.

Though pigeon peas are mainly grown as an intercrop with cereal crops they had relatively high prices of K250-K500/Kilogramme in 2014/15 season, according to AHCX trade data, 2015.

Lockie says, “We hope this is adequate producer motivation to invest in pigeon production, including in Green Belt Initiatives (GBI). Pigeon peas production towards export market, through structured markets, forms a perfect member of a basket of crops to operationalize National Export Strategy.”

However for groundnuts the production has been on the lower side with annual average production ranging 300,000 metric tonnes to 400,000Metric tonnes during with 310,980 metric tonnes in 2014/2015, representing 22 per cent decline compared to previous season due to dry spells.

According to Lockie, “Soya beans annual production ranges from 90,00 metric tonnes to 140,000 metric tonnes and during 2014/15 season, 126,862 metric tonnes was recorded, representing 4 per cent decrease from previous season. It is estimated that there is aggregate domestic demand of 400,000 metric tonnes, which excludes potential export market.”

Lockie believes promotion legume production could rescue the country of the current forex shortage.

Alex Malembo, National Programme Coordinator for Sustainable Agriculture Production Programme (SAPP) in the Ministry of Agriculture, Irrigation and Water Development agrees with Lockie and says currently there is underproduction which is not meeting demand both locally and internationally.

“Currently demand is huge and we are assisting farmers through extension services to grow more legumes. We have trained lead farmers and have distributed legume seeds to boost production.

“We have formed farmer clubs which will graduate into associations and later cooperatives. We believe growth of each stage will bring collective increased productivity and help farmers market in bulk to increase their power of bargain for better prices,” said Malembo.

According to Malembo, the programme has engaged lead farmers in extension services and seed multiplication which is expected to bring more legume seed adapted to local conditions.

“We are currently focusing on improving quality of production and reducing post-harvest losses.

“Seed multiplication farmers have also been linked to seed companies to have better standards while increasing their income,” he added.

Prices of the legumes have an upsurge on the local market with beans going up to K800 on the informal market while unconfirmed reports indicate pigeon peas were at K600 during this lean period.

However other reports indicate an external demand for pigeon peas of over 6 million tonnes.

Malawi farmers still complain of dwindling earnings from tobacco and recently fewer farmers opted to grow the crop as indicated by reduced registration from Tobacco Association of Malawi.

Sustainable Agriculture Production Programme (SAPP) is among the programmes that government is implementing to increase production of agricultural commodities and improve livelihoods of people in Balaka, Chiradzulu, Chitipa, Lilongwe and Nkhotakota.

The programme is funded by International Fund for Agriculture Development (IFAD). It also seeks to improve agricultural marketing and commercializing farming.

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