Malawi Kwacha fragile stability irks farmers
Farmers Union of Malawi (FUM) on Tuesday expressed disappointment over the timing of the appreciation and pace of the local currency, Kwacha, against major international currencies.
The local unit is now trading at K692 against one US$.
FUM President, Alfred Kapichira Banda told journalists in Lilongwe that the recent marketing developments particularly on exchange rate are a scaring to livelihoods of farmers.
“While the appreciation has excited other segments of the society, mostly importers, on one hand, the same is nuisance and of course a perceived sabotage to farmers who bought their farm inputs at more depreciated Kwacha rate than now,” he said.
Kapichira-Banda observed that it is a tradition in the country to see a local unit gaining value when markets for Malawi’s major crops such as tobacco are opening which in essence displeases and sabotages farmers.
“The current pace and timing of the appreciation is shocking and compels one to suspect that there is an invisible hand behind the current movement of the Kwacha,” he said.
But the Reserve Bank of Malawi (RBM) through a statement has assured farmers that the current exchange rate system was the best and makes them competitive on the international market.
On pricing of some crops particularly tobacco, he said, it is high time government involve farmers when coming up with minimum prices for the product.
He said there should be a negotiation table on the minimum prices of tobacco between government and the farmers representatives before it meets the tobacco buyers because the union believes that if a farmer is given opportunity to set the prices, there can be a win-win situation, no complaints from farmers and also disagreements at the market with buyers could be solved.
Malawi economy depends on agriculture with tobacco as its major exchange earner.
Farmers are just being greedy, all the farm imput were bought by October when the kwacha was trading at 550, so they want to sell there produce at 700. Let us not forget all Malawians are not farmers, most people have salaries in kwachas so government needs to control inflation, by allowing kwacha to appreciate to its true value, ANy interference by government will be Anti IMF and we can lose budget support
I do not any problem here, farmers should learn to buy farmers materials soon after selling their produce
There is surely an invisible hand and that is Bankers Association of Malawi who cartel among all bankers and fix bank rates to rob from farmers ! You will not find anything in writing but do ‘agree’ . These banks must be investigated asap.The best way is to allow get paid in dollars and let farmers decide when to offload these dollars and at what rate to root out this bankers nonsense. Enough for robbing poor farmers by commercial banks !
My idiotic take is this: If the Kwacha is left weak at say K750 to a dollar during this farm produce selling season there will be too much Kwachas chasing very few goods on the market and this will make the current high inflation even worse. The problem I see here is the govt doesnt budget for our projected forex revenues because if the forex was evenly spread across the 12 months this wouldnt be happening.
Tsoka Amene Muli Mkati mwadziko ife wathu ndiwaku zambia kapena mozamb, duty free monga unali ufa wa zembo uja, pa 3 dollar pa kg. enough is enough. fert anadula moto ukakutentha sakuuza ndi mzako
The farmers should keep their money in USD denominated accounts and should be allowed to buy their inputs in USD. The best solution id for the farmers to won a cooperative society which should exclusively import and sell farm inputs to its members.
its not only about tobacco farmers but Malawi as whole, kwacha depreciation was killing everyone including tobacco farmers as well international business so let’s fair in this game.