Govt 'foolishly' defends 50% maize price hike

The Malawi governments says it belives the recent price increase of the country’s staple food, maize by 50 per cent would save the poor from exploitation of parallel market traders.

Deputy Minister of Agriculture Kingsley Namakhwa said this when he granted an interview to the press in the capital city Lilongwe on why state-owned produce trader Admarc has raised the maize price by 50 percent.

According to the new prices, Admarc is now selling a 50 kg maize bag at K3 000 ($18), up from K2 000 ($12). This translates to K60 ($0.36) per kg.

Namakhwa: Justifies grain costs increase

The development has already sent panic and shocks to many households, especially in rural areas with Consumers Association of Malawi (Cama) warning that the new price would inflict more suffering on Malawians who are already struggling with several commodity shortages and sky-shooting prices.

Already with fuel and foreign exchange unavailable, there are increasing costs of living on basic needs such as, soap, salt, sugar, oil, bread, transport and house rentals.

But Namakhwa strangely defended the move saying it would prompt maize price stabilisation on the market and that consumers who comprise mostly the poor would be protected by this price hike.

“Maize stocks are there at Admarc but there was too much bulk-buying by vendors that is why we had to raise the price from K3,000 per 50kg bag to K4,000. This will ensure that price match on the market with what was already being offered by vendors whom we suspect they want to start hoarding maize,” said Namakhwa.

Due to basic market rule of demand and supply, just after the price increase announcement, vendors in townships in Lilongwe, Blantyre and other districts have already started selling the maize at K5,000 per 50kg bag.

In February this year, Admarc reduced the price of maize from K60 per kg to K40 per kg, a move that commentators attributed to availability of maize on the market, including with private traders.

The revision of the price has prompted speculation and public calls that Malawi, which was a maize basket just few years ago is now short of food.

Cama executive director John Kapito has said the increase is a punishment to ordinary Malawians who are already struggling to make ends meet with the current financial problems affecting most households.

“It is unfortunate that maize prices are going up at a time when the maize is in short supply and people have no money.

“K3 000, to those that have so much money, may be a small figure, but I am aware as a consumer activist that that amount is not available in many households in Malawi,” said Kapito.

The Nation quotes Jeffrey Sadyalunda of Chanyumbu Traders, saying private traders were selling the maize according to the availability and the cost of transporting the grain.

“It is very unfortunate that society lashes out at us private traders, saying we are unscrupulous. Admarc has increased the price when we have kept [ours] stable regardless of where there is good supply and where there is no maize,” said.

The recent price increase of maize will be inflationary as food has more weight on the country’s consumer price index.

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