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Malawi faces large cereal supply gap as the food insecure population continues to increase

  • Food Security Outlook Update
  • Malawi
  • November 2016
Malawi faces large cereal supply gap as the food insecure population continues to increase

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  • Key Messages
  • Current Situation
  • PROJECTED OUTLOOK THROUGH MAY 2017
  • Key Messages
    • Between November and January, outcomes will continue to deteriorate across most of the country as food consumption gaps widen and households continue to engage in irreversible coping strategies. Crisis (IPC Phase 3) areas and Emergency (IPC Phase 4) populations are projected throughout the south and parts of the central region, at the start of the peak of the lean season. By February, Emergency (IPC Phase 4) and Crisis (IPC Phase 3) areas outcomes are expected. Between April and May outcomes should improve to Stressed (IPC Phase 2) for most areas as households begin to access their own production. 

    • Beyond October, the cash transfer portion of the response is not fully funded, there are non-maize commodity supply gaps, and very little information about the availability of funds for logistics and transportation for in-kind distributions. Between August and October, the number of households benefitting from assistance in affected districts contributed to stable national maize prices. However, significant price increases are anticipated in November, in accordance with normal trends. 

    • Prospects for the 2016/17 production remain unclear as many households remain uncertain as to their ability to access adequate inputs. Coverage for the farm input subsidy program (FISP) this season will be too low to spur adequate production, adding to concerns about the next production season. For households participating in the FISP, the program has been delayed. Households who will not benefit from the FISP are facing huge income gaps to access inputs from commercial markets.


    Current Situation

    STAPLE PRICES            

    • Average maize grain prices for October remained very high at 157 percent greater than the five-year average and 53 percent higher than last year’s average price in October. The national average price for maize grain between September and October was stable. This price stability can be attributed to the high number of households benefitting from assistance in affected districts in October. Significant price increases are anticipated in November, in accordance with normal trends.

    MAIZE AVAILABILITY

    • Malawi’s recent formal and informal import levels are too low to satisfy the estimated deficit for the current consumption year. As of late October, only about 150,000 MT formal imports (mainly from Zambia) had been assured. Furthermore, FEWS NET monitoring data and a recent MVAC maize market assessment data are showing reductions in the volumes of informal maize trade. Between April and September 2016, trade volumes were only 60 percent of the five-year average for that same period.  
    • ADMARC posts opened in late October and began selling subsidized maize at MWK 250/kg, which is more than double the price during the previous marketing season (MWK 110/kg). This has also increased the availability of maize to those households that ran out of own produced food and are having to rely on purchases. However, anecdotal reports indicate that some consumers are finding prices at the ADMARC posts to be too high and are going to other cheaper markets. 
    • There is uncertainty to the ability of ADMARC to satisfy maize grain demand to the end of the consumption season in March 2017. At the start of the consumption season, ADMARC announced maize grain requirements of about 250,000. By the end of October, the parastatal reported having managed to locally purchase about 100,000 MT with plans to fill the remaining gap by imports. Despite some import deals reported to have been made, imported maize inflows have been very minimal, raising uncertainty as to the capacity of ADMARC to satisfy maize grain demand in the interim. For instance, food insecure population that is planned to receive cash transfers will require the equivalent of about 75,000 MT of maize between November 2016 and March 2017. This amount alone will be a large strain on ADMARC’s current supply capacity unless international imports are expedited. 

    MACROECONOMIC CHALLENGES            

    • At the beginning of November, the Malawi Energy Regulatory Authority (MERA), announced petrol and diesel price increases of 5 and 6 percent, respectively. The increase has already resulted in transport cost increases, which are likely going to be pushed to consumers. This could further increase food prices above the projected price levels in deficit areas, especially in markets in the south that rely on maize from surplus producing central and northern regions. 
    • According to a recent GIEWS Country Brief, this year the FISP has been “modified to increase private sector participation, with farmers provided with coupons to purchase inputs directly from private traders, while legume seeds will also be distributed under the program in an effort to diversify agricultural production.” While planting rains have been received in November, implementation of the Farm Input Subsidy Program (FISP) is currently delayed and remains uncertain. Input import levels by both government and the private sector remain unclear, as does fertilizer availability in-country.

    HUMANITARIAN ASSISTANCE            

    • For the month of November, about 5.7 million people were planned to receive assistance, either in-kind or cash transfers. However, according to information provided by the Humanitarian Response Committee, funding gaps and commodity supply shortfalls still exist. This does not meet FEWS NET’s criteria (planned, funded, likely) for inclusion of humanitarian assistance in the food security analysis. As of mid-November the non-maize commodity funding was still facing a 15 percent shortfall; an improvement from the 46 percent shortfall in October. The cash based transfer program could face reductions over the next few months in the likelihood that funding gaps remain for the rest of the consumption year. For January to February plans, the program faces a funding shortfall of 10 percent and a shortfall of about 30 percent for the March interventions.

    FOOD INSECURE POPULATION        

    • Results from an October update to the Malawi Vulnerability Assessment Committee (MVAC) indicate that there is a small increase in the food insecure population. This increase of 3 percent or 200,000 people are mainly located in the central districts of Kasungu and Ntcheu. Since more resources will be needed to assist this population, this will widen the existing resource gap.
    UPDATED ASSUMPTIONS

    All other assumptions discussed in the October Food Security Outlook are still valid. 


    PROJECTED OUTLOOK THROUGH MAY 2017

    Areas in parts of the southern and central region will be in Crisis (IPC Phase 3) with some populations in Emergency (IPC Phase 4) in the absence of humanitarian assistance. Very poor and poor households will benefit from an increase in planting and weeding labor opportunities as the agricultural season comes to a peak, assuming a timely start. Because of the extremely high food prices expected during this period, most people will not make enough to cover their food needs and will experience food gaps. ADMARC posts will be opening in October, but will likely experience frequent stock-outs and long queues. Poor and very poor households that have depleted most of their assets will continue to engage in crisis coping mechanisms due to the below-average incomes they are earning from labor and the very high food prices that are expected.

    Food  consumption  is  expected  to  improve  in  the  late  February  to  May  period  as  most  of  the  households  start consuming green foods in addition to harvesting dry crops from the 2016/17 production season. Very poor and poor households will continue to search for weeding and other agricultural related labor. In addition to this, households will be exploiting natural resources such as the collection of firewood and making charcoal for sale. There will be an increase in IPC Phase 4 populations in areas in Crisis (IPC Phase 3) and an increase in the number of areas facing Emergency (IPC Phase 4) acute food insecurity outcomes, in the absence of humanitarian assistance. Middle and better-off households will continue engaging in desperate livestock sales to gain incomes for food and non-food purchases. With a seasonal forecast for normal to above normal rainfall, households may start accessing green crops for consumption between late February and late March, which would substantially improve their food access. Between April and May outcomes should improve to Stressed (IPC Phase 2) for most households as they begin to access their own production.

    This Food Security Outlook Update provides an analysis of current acute food insecurity conditions and any changes to FEWS NET's latest projection of acute food insecurity outcomes in the specified geography over the next six months. Learn more here.

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