The country’s social monitoring body, Center for Social Concern (CFSC) is calling the Malawi government through ministry of agriculture to quickly reopen Admarc, the nation’s sole maize marketer in a bid to caution looming hunger.
The call comes amid rising of cost living perpetuated by the falling of the country’s currency, the Kwacha against major foreign exchange rates including the American Dollar, British Sterling among others.
Through CFSC monthly data analysis report of July, 2015 released on Monday, August 17, 2015 which is available to the Maravi Post, repeatedly indicate staggering price increases of essential commodities with the evident upward price pressures are resulting in a constant spiral of the cost of living.
The data collected through the Basic Needs Basket (BNB) survey from major towns and cities of Karonga, Mangochi, Mzuzu, Lilongwe, Zomba and Blantyre revealed skyrocketing of essential items including maize, sugar, beef, beans and nonfood items such as soap, lotions, electricity, water, rentals among others.
“As the cost of living is rising, families are finding it difficult to meet their basic needs. In the month of June, the basket went up by 2.7% from MK118, 663 in May to MK121, 875. The rising trend continued in the month of July, from MK121, 875 to MK126, 457 signifying an increase of 3.8 percent.
“This is in sharp contrast to 2014 when the cost of the basket declined by an average of 1.7% in June and slightly increased by 2.6%in July. While month-on-month calculations indicate that basic top few food items witnessed increase in their average prices during the last two months, however, the hard-hitting factor is that crop prices are soaring”, reads the report.
The CFSC’s BNB further reveals that in the month of July, the price of beans went up by 15% as for maize, the price per kilogram rose up by 5.8 % in June and pushed up further by 0.94 percent in July such that a 50Kg of bag as of end July was selling at an average price of MK6, 389 in the cities and major towns.
“In Blantyre and Mangochi the prices were as high as MK8, 000 and MK7, 500 respectively for an equivalent bag of 50kgs. Other consumer commodities such as sugar and beef have gone up by 3.7 %and 0.5% respectively. Crop prices, more especially maize, play an important role in the basic needs basket and in the overall cost of living for most of the society in Malawi.
“Maize has a fundamental role throughout Malawians’ livelihoods. Maize is, after all, a basic need, the very stuff of life in Malawi. It touches everything and is a central pawn in political strategies of the state and households. Certainly maize is more than nutrition in Malawi; maize is an effective means of power and control; -in other words, maize is political. Many Malawians are likely to survive at the margins of society and maize price spikes and unprecedented volatility in the commodity will hurt several households”, predicts the BNB report.
But the report dismissed the current soaring crop prices being attributed to the direct result of poor crop harvest and scarcity rather excessive speculation which was a key factor in driving up national crop prices right now, especially maize.
“Indications from the BNB survey are that the current soaring crop prices are not necessarily the direct result of poor crop harvest and scarcity. A significant portion of the increases in price and volatility of essential food commodities can only be explained by the emergence of a speculative bubble and hoarding.
“The crop situation has attracted the speculators for short-term profit at the expense of people living a dignified life; thus excessive speculation is a key factor in driving up national crop prices right now, especially maize. It should therefore be efficiently stopped at both the national and very local level if we really want to prevent the food crisis from happening.
The Maravi Post caught up with Mathias Kafunda, CFSC’s Economic Governance and Justice Programme officer on the prospects of the recent cost of living amid looming hunger who conceded food shortage due to poor harvest catalyzed by floods, dry spell among others.
But, Kafunda calls for quick reopening of Admarc to caution the food shortage which private traders were taking advantages of the current economic trend by hiking food items including maize the only staple food to the country’s population.
“There is little anger of wealthy people in the urban areas going hungry because of maize shocks, but they could be affected by rural to urban migration and instability triggered by volatility in food prices in rural places. Thus, there is a pressing need for clear measures of transparency and regulation to deal with speculation on crop commodities futures markets.
“It is about controlling the road direction and pace of change of all crop prices across the economy, through early opening of ADMARC, and above all, whatever government is doing on the subject, the public needs to be constantly informed”, urges Kafunda.
