Maize supplies continue to be tight during the final months of the 2015/16 marketing year

• Most of the country is facing Minimal (IPC Phase 1!) acute food insecurity outcomes, in the presence of humanitarian assistance. Poor households that are not receiving humanitarian assistance are experiencing Stressed (IPC Phase 2) outcomes due to livelihood protection deficits because of high prices and lower than normal earnings from agricultural labor due to El-Niño induced drought conditions in the central and southern region.

• The magnitude of maize price increases this year is atypical. In January, prices ranged from 190 – 243 MWK/kg. In comparison to last year, the percentage increase is between 85 – 155 percent higher. The prices of maize grain are expected to continue trending significantly above average for the entirety of the Outlook period. In the absence of additional imports, subsidized maize supplies through ADMARC depots are estimated to run out in March, about one month before the harvest is expected to begin.

• Minimal (IPC Phase 1!) food security outcomes are only expected to continue through March, in the presence of assistance. There is the possibility that assistance will also continue in April, but additional information is still forthcoming. By April, in the absence of any assistance, food insecure districts in the central and northern regions of the country will be in IPC Phase 2 and outcomes in the south will deteriorate to IPC Phase 3. These outcomes will improve after the harvest in May, and Phase 1 and Phase 2 outcomes are expected in areas from June to September.

Current Situation

After a poor 2014/15 production season due to flooding and dry spells, national maize supplies continue to be tight during the final months of the 2015/16 marketing year. Formal and informal maize imports, as well as humanitarian distributions of maize, are not substantial enough to fill the national maize deficit. The availability of maize is significantly below average in most households. Poor households that are not receiving assistance are relying on food purchases for their basic needs, however food access through purchases is constrained due to high maize prices, including prices for maize alternatives like cassava and beans.

Most of the country is facing Minimal (IPC Phase 1!) acute food insecurity outcomes, in the presence of humanitarian assistance. Poor households that are not receiving humanitarian assistance are experiencing Stressed (IPC Phase 2) outcomes due to livelihood protection deficits because of high prices and lower than normal earnings from agricultural labor. Humanitarian assistance was rolled out to 25 districts that were identified during the annual Malawi Vulnerability Assessment Committee (MVAC) in mid-2015. The current food security outcomes are only expected to continue through March. There is the possibility that assistance will also continue in April, but additional information is still forthcoming. By April, in the absence of any assistance, food insecure districts in the central and northern regions of the country will be Stressed (IPC Phase 2) and outcomes in the south will deteriorate to Crisis (IPC Phase 3).

Between November 1, 2015 and January 31, 2016, central and southern parts of the country received 50-79 percent of average rainfall, while most of the northern region received 80-120 percent of average rainfall within the same period. Most farmers reported late access to inputs through the Farm Input Subsidy Program (FISP) as well as lack of access to alternative sources. While farmers normally receive FISP inputs in October and December, as of mid-January a significant numbers of farmers still had not received inputs. In order to plant, farmers were forced to use recycled seeds which are known to reduce yields. Most farmers also failed to apply fertilizers on time due to the extreme dry conditions prevailing across central and southern Malawi areas, resulting in poor crop development.

The Malawi SGR maize stocks are at their lowest in years. The Strategic Grain Reserve (SGR) which stood at about 86,000 MT for the 2015/16 consumption season released a total of 84,000 MT of maize that was committed for humanitarian assistance programming that began in October/November 2015 and is planned to conclude in March 2016. The SGR has nearly distributed all of its stocks. Carryover stocks are expected to be below average going into the next marketing year.

Maize prices typically increase between December and January, but the magnitude of the increase is atypical this year. January prices ranged from 190 – 243 MWK/kg. In comparison to last year, the percentage increase was between 87 – 156 percent higher. FEWS NET assessments in mid-January found maize prices in some markets are more than double the 2015 prices and up to 170 percent higher than the five-year average. 

ADMARC is continuing to sell subsidized maize, but due to high demand they have requested an additional 18,000 MT of maize so that they can continue selling. Field observations and media reports are showing that most households are failing to access the subsidized maize with very poor and poor household members spending as much as 3 nights in line for maize. In the absence of additional imports, ADMARC supplies are estimated to run out in March, which is about one month before the harvest is expected to begin.

Earlier, FEWS NET reported that the planned humanitarian assistance programming would stop after February due to funding gaps and pipeline breaks. Based on the latest information from partners, assistance programming will continue into the month of March. In-kind rations for March will include the distribution of a 50 kg bag of maize (from the 84,000 MT committed by the SGR) and nearly the same amounts of the other items included in earlier rations.  

National Level Assumptions

The Food Security Outlook for February to September 2016 is based on the following national-level assumptions:

• 2015/16 seasonal progress: Based on the latest national forecast by the Malawi Department of climate Change and Meteorological Services,  the country is likely going to receive below-normal rainfall up to the end of the rainy season, with a likelihood of an early cessation of rains in late February or early March. The Standardized Precipitation Index (SPI) monitors the severity of drought events. The SPI for rainfall from October 2015 to February 2016 ranges from moderately to extremely dry (Figure 1). These dry conditions will exacerbate the poor crop conditions that have resulted from a late start of the current season, poor access to agricultural inputs, and prolonged dry spells in the December to January period. While rains in the northern region started on time, rains in the central and most of the southern region began a month later than normal. Subsequent rainfall across the entire country was erratically distributed in both space and time (Figure 2). Dry spells have contributed to poor seed germination and the need to replant crops. By late December and early January, the area planted in the northern and central regions had dropped slightly to 90 percent of average. In the southern region, the area planted is around 60 percent, well below average.
• National crop production prospects: are likely going to be low owing to drought conditions in the central and southern region, as well as reduced access to subsidized inputs through the FISP program. Ministry of Agriculture district reports from a sample of districts in central and southern region are already estimating production reductions similar to or worse than the 2014/15 production season due to below normal rainfall. Production of main food crops such as maize, sorghum, millet, and pulses is expected to be 25 to 35 percent below normal. Production for tobacco is estimated to decrease 5-10 percent of average, while cotton is estimated to be 30-50 percent of average. Access to green crops and the main harvests will be delayed by one month. Green crops will be accessed in late march and main harvests in May due to the delayed start of season. Assessments in January showed that most crops across all regions were in the early development stage in January. During this month crops are typically much further along and in the early maturity stage of development. This delay is due to poor germination, permanent wilting, and the replanting of crops.
• Food availability between February and May 2016: Zambia’s recent suspension of maize exports will decrease informal trade flows to Malawi between February and April. It is assumed that both informal and formal imports to date is not enough to cover the national cereal gap. Until the main harvest in April/May, the country will continue to face a maize deficit of approximately 360,000 MT. Recent FEWS NET assessments have shown that many households are relying on market purchases, and this is expected to continue through April/May. Households may also access some modest green crops for consumption in March. However, green crop access will be significantly below average owing to the estimated below average production. ADMARC maize availability is expected to be erratic during this period due to abnormally high demand this consumption year. June - September 2016: The Malawi SGR stock levels will remain well below average up until the start of purchases from farmers during the July/August period. SGR carryover stocks will be less than 5,000 MT during the harvest period in April/May.
• June to September maize availability: After the start of the harvest in April/May households will be consuming food from their own production. Being around harvest time, households will be consuming food from own production in the May to September period which will see reliance on market purchases ease and this can stabilize prices at the current above average levels. Since crop conditions this season have been so poor, the normal period in which households typically consume their crops is expected to be much shorter during the 2016/17 consumption year. Between June and September period, below normal imports are expected due to below average regional maize supplies. As a result of this, significantly below average trade is expected between Malawi and neighboring Tanzania and Mozambique. There is little likelihood that Malawi will formally import any maize to fill the national food gap that is expected during the 2016/17 consumption year.
• Formal maize imports: Malawi is likely going to register reduced maize imports due to reduced forex earning prospects. It is estimated that tobacco production may reduce by about 10 percent due to below normal rainfall. The Tobacco Control commission also projects that demand for Malawi tobacco has fallen by about 12 percent which may lead to lower prices of the major forex earner from which Malawi realize about $335 to $340 million per year. Other major forex earning cash crops such as tea and cotton are reported to also have registered significant production reductions of up to 40 percent as compared to normal which will worsen foreign exchange earning opportunities. Malawi maize imports will also be affected by the suspension of exports to Zimbabwe and Malawi by Zambia which would entail increased import parity should maize grain be imported from areas with higher prices or covering long distances. Low national stocks in the absence of formal imports could also lead to ADMARC the national grain marketing board having lower stocks than demand which could trigger further price increases as has been the case between November and January. 
• Household Purchasing power: Between February and September, household purchasing power will be eroded due to the expected continuation of the depreciation of the local currency. Normally, Malawi earns most of its foreign exchange revenue through tobacco sales during the June/July period, but since tobacco crop production this season is expected to be below average. The Malawi Kwacha has undergone a significant depreciation of about 53 percent from January 2015 to January 2016. Due to the anticipated poor production season especially in central and northern Malawi, and high inflation caused by the steep depreciation of the Malawi Kwacha, food prices will remain atypically high and may not decrease seasonally in the May to September harvest and post-harvest periods.
• Maize Prices and market performance: The prices of maize grain are expected to continue trending significantly above average (Figure 3). Maize prices will be more than double the recent five year average (100-200 percent higher) between February and April. Prices may stabilize or continue increasing between February and April. The seasonal price decline that follows anticipated harvests in March may be delayed because of anticipated late availability of harvests. Between May and September, prices will remain significantly above average. Stability in prices may be experienced between May and June when availability is typically highest. Prices may stabilize or continue increasing between February and April. Below average differentials due to depreciation of the Malawi Kwacha may also make it unattractive for traders to import Zambian maize. The maize imports especially through informal cross border trade from Mozambique and Zambia are likely going to increase seasonally but will be below average due to low production in the areas that border Malawi.
• Income Availability: Despite projected increases in crop prices, incomes from tobacco in central and northern Malawi and incomes from cotton mainly in southern in addition to other sellable crops will still be below average. During the February to April period as well as the May to September period, poor and very poor household cash access will be below average due to a reduction in agricultural labor availability as well as significant reductions in the volume of key cash crop sales in central and southern Malawi. The below normal rainfall and drought conditions are significantly reducing agricultural labor access. The influx of people looking for labor and lower than normal incomes among the wealthier households has affected wages with those offering labor paying lower wages ranging from 75 to 80 percent of normal.
• Humanitarian Assistance: The humanitarian assistance program for about 2.8 million people that started in October will continue to protect livelihoods and improve food consumption gaps for the majority of very poor and poor households in 25 out of 28 districts in Malawi through March, with the possibility of being extended into April. Targeted households are being given a month’s ration of maize, pulses, and vegetable oil where in-kind transfers are being implemented, or a cash equivalent where cash transfers are being implemented. Humanitarian Assistance programs are currently not planned, funded, or likely during the period following the harvest in May (June-September).

Most Likely Food Security Outcomes

Most households across the country are experiencing Minimal (IPC Phase 1!) outcomes in the presence of humanitarian assistance in the form of food rations or cash. If this assistance was not there, Crisis (IPC Phase 3) outcomes would persist throughout the southern region, and Stressed (IPC Phase 2) in the central and northern region. These improved outcomes are expected to continue through March, and assistance could possibly extend to April. If there is no continued assistance after March, IPC Phase 2 and 3 outcomes are expected between April and May. Livelihood protection deficits and food consumption gaps will improve across most of the country between May and September when households in the north and central regions access food from their current harvests, however, some areas will remain Stressed (IPC Phase 2) during this period.