Prolonged dry spells significantly reduce national production prospects

• Malawi is expected to experience moderate deficits in domestic food requirements due to reduced food crop prospects caused by flooding and prolonged dry spells this season.

•  In 17 of the flood-affected districts across the country, poor households are receiving humanitarian assistance from April to July. These flood-affect households are facing Stressed (IPC Phase 2!) food security outcomes in the presence of humanitarian assistance for the first four months of the outlook period. This assistance is being distributed prior to the annual national food security assessment that is scheduled to take place in June. Poor households in areas impacted by prolonged periods of dryness will face Stressed (IPC Phase 2) food security outcomes during the outlook period.

• Average maize prices in March are stable and at three-year average levels. However between April and September, projected national average maize prices are projected to be about 35 percent higher than the three-year average. 

Current Situation

• The 2014/15 harvests are delayed due to the late start of the season. This delay is contributing to reduced household food availability during a time when households typically have access to their new harvests and are depending less on markets for food purchases. Currently, households in most districts impacted by abnormal dryness are facing Stressed (IPC Phase 2) outcomes.
• In March, average national maize prices are stable and at three-year average levels.
• Second round production estimates by the Ministry of Agriculture (Irrigation and Water Development) indicates reductions in most key food and cash crops for this consumption period. These maize production estimates for the 2014/15 season indicate a decline of about 26 percent when compared to the previous 2013/14 season and decline of 22 percent when compared to the five-year average.
• In March, the National Food Reserve Agency (NFRA) reported having about 50,000 MT of maize stocks in the Strategic Grain Reserves (SGR), while private traders reported having about 77,000 MT of maize from the 2014 production season. These stocks can offset the projected production shortfalls, especially if government procured the maize reportedly stocked by private traders for replenishing the SGR, which will supply  subsidized sales through ADMARC in order to stem maize price increases.
• Between February and March, informal cross border maize imports recorded a 32 percent increase, following the five-year average trend. While informal exports remained stable and above the five-year average between February and March. Overall, cumulative informal maize imports between  April 2014 and March 2015 recorded a 66 percent drop in comparison to the same time in the previous marketing period. This may be attributed to the bumper 2013/14 harvest.
• An assessment by the Malawi Vulnerability Assessment Committee (MVAC) identified that about 620,000 people displaced or affected by heavy rains and flooding would need humanitarian assistance from April to July 2015, and likely for the remainder of the consumption period since dryness will hamper any irrigated production that may be attempted. This figure is likely going to increase when the MVAC completes its annual assessment in June because erratic rainfall has led to 30 percent reductions in food crops and 30-40 percent declines in major cash crops in affected areas. 

National Level Assumptions

The food security outlook for April to September 2015 is based on the following national-level assumptions:

2014/15 Harvests and Food Availability

• Second round crop estimates by the Ministry of Agriculture, Irrigation and Water Development (MoAIWD) indicate that Malawi will register maize production reductions of about 30 percent in comparison to the previous year, while other cereal production will decline by about 10 percent in comparison to 2013/14 production levels.  Based on these estimates, domestic food supplies will not be enough to meet national requirements and additional imports may be necessary.   
• SGR opening stocks are around 50,000 MT. However, some of these stocks will be used to supply humanitarian assistance to households affected by floods; these same stocks are also used by ADMARC for commercial sales. 

Markets and Trade

• Based on FEWS NET’s maize price projections for April 2015, national average maize prices will range from MWK 90-95/kg during the April to June quarter and MWK 100-110/kg during the July to September quarter. The average national prices will be approximately 35 percent above the three-year average.
• Informal maize imports  from neighboring Mozambique and Zambia normally increase between April and September. However, due to production shortfalls in key sources areas in these countries, inflows may be reduced for the outlook period. 
• The depreciation of the Malawi Kwacha stopped depreciating in November 2014, and has since started appreciating. It will likely continue appreciating between April and September because this period overlaps with the tobacco marketing season. This trend may help to maintain stable commodity prices for things including food. However, speculative behavior by traders due to the estimated production shortfalls may exert upward pressure on food prices, especially maize.

Labor

• Agricultural labor opportunities are likely going to reduce between April and July due to significant reductions in harvests which will reduce the amount of harvest labor demand, as well as a reduction in the incomes of middle and better off households that normally hire people for agriculture labor. Normal levels of households will be seeking labor during this period because of significant of own production shortfalls.
• Non-agricultural labor opportunities are expected to be at normal levels during the outlook period.

2014/15 Cash crop production and incomes

• This season the government did not support the cotton input program, and as a result of this there was substantially less seeds and pesticides available for cotton production. Cotton production this season is 31 percent lower than last year’s production and about 23 percent below the five-year average. This reduction will in turn reduce farmer incomes from cotton sales, which is usually used for household food purchases.  
• Tobacco production is expected to be average this season, and the marketing season just started in April. Incomes from tobacco is in USD, which will help to maintain stable macroeconomic conditions and will allow the Government of Malawi to purchase key imports, including fuel and inputs for the upcoming production season.

Humanitarian Assistance and Social Safety-nets

• Humanitarian assistance for people affected by flooding in the southern region (and a few districts in the central region) is planned from April to July, and this assistance will cover a significant part of individual food needs during this period. Approximately 53 percent of the beneficiaries are receiving in-kind assistance and about 47 percent are receiving cash transfers. 
• In response to crop damage due to heavy rains and flooding this season, the MoAIWD and other development agencies have been providing maize seed and fertilizer, along with sweet potato and cassava planting materials to some households in flood-affected areas for irrigated production. However, because of the dry conditions, irrigated production is expected to yield very little this season.

Most Likely Food Security Outcomes

• The districts worst affected by heavy rains and flooding are Nsanje, Chikwawa, Phalombe, and Zomba. Approximately 112,000 poor households in these areas are facing Stressed (IPC Phase 2!) food security outcomes, in the presence of humanitarian assistance.
• Approximately 105,000 households in thirteen flood-affected districts across the country are facing Stressed (IPC Phase 2) food security outcomes, in the absence of humanitarian assistance.

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