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Above-average national cereal production levels, but localized food insecurity persistent in Central Karonga and Middle Shire livelihood zones

  • Food Security Outlook
  • Malawi
  • July - December 2014
Above-average national cereal production levels, but localized food insecurity persistent in Central Karonga and Middle Shire livelihood zones

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  • Key Messages
  • National Overview
  • Key Messages
    • Estimates by the Ministry of Agriculture, Irrigation and Water Development indicate that 2013/14 maize production is approximately 9 percent higher than the previous season and 12 percent higher than the five-year average. Overall, a 1.5 million MT surplus in maize is expected with some increases ranging from 7 to 10 percent among other food crop production.

    • The average national maize price decreased in June, according to seasonal trends, but continues to be 60 percent above the five-year average. Prices are expected to rise over between July and December, but they will be lower than those recorded during the same period last year.

    • Extended periods of dryness, poor rainfall distribution, and an early cessation of rainfall affected localized production in parts of the Middle Shire and Central Karonga livelihood zone. Currently poor households in Karonga, Balaka, Neno, and Mwanza district are Stressed (IPC Phase 2) and outcomes are expected to deteriorate to Crisis (IPC Phase 3) between August and December.


    National Overview
    Current Situation
    • Currently, most areas in Malawi are generally experiencing favorable food security conditions and nearly all but a few districts are reporting that approximately 1 percent of households do not have staple food from their own production .  As of late June and early July, only localized areas in Central Karonga and parts of the Middle Shire (a chronically food insecure area) were reporting constrained food access among poor households due to production shortfalls in food and cash crops because of seasonal dry spells and early cessation of rains.

    • The Ministry of Agriculture, Irrigation, and Water Development (MoAIWD) is estimating a maize staple production of 3.9 million metric ton according to the second round report, representing a 9 percent production increase in comparison to the 2012/13 season. This estimated production level will leave the country with a maize surplus of about 1.5 million MT. Estimates of other food crops are also reported to be 4-10 percent higher than the previous season.

    • Between May and June, average national maize prices decreased by roughly 9 percent. Key drivers for the decrease in prices are primarily the increased availability of diverse foods from this season’s harvests, lower household demand as most households consume food from their own production, and traders have released maize stockpiled from last season.

    • Despite increased national production levels and an estimated surplus, informal cross border trade maize imports in June have almost doubled since May. This increase is a result of more robust imports at Muloza (bordering Mozambique) that is being driven by lower prices on the Mozambique side. On average, maize from Mozambique is being purchased for about MWK 64/kg in comparison to MWK 71/kg on the Malawi side. Informal exports in June have remained low (415 MT) as compared to exports in May (432 MT). Almost all informal exports were recorded at the Songwe and Mbirima border points into Tanzania.

    • The grain marketing board, ADMARC, and the National Food Reserve Agency have not yet started to purchase maize this season. Currently, no planned procurement of maize has been announced and the situation with the suspension of donor assistance and the financial constraints in government does not appear to be improving. This is disconcerting since by the end of the 2013/14 consumption year stocks in the strategic grain reserve were very low.

    • The annual food security assessment by the Malawi Vulnerability Assessment Committee (MVAC) was conducted in July, but the results are not yet released. This assessment will determine the number of people likely to face acute food insecurity during the 2014/15 consumption year and the level of humanitarian assistance that may be necessary to fill any food or livelihood protection deficits.

    Assumptions

    The Food Security Outlook for July to December 2014 is based on the following national-level assumptions:

    Agroclimatology
    • There is an 80 percent chance that an El Niño will develop in Southern Africa by the start of the 2014/2015 season. The El Niño phenomenon is generally associated with below-average rainfall (40 percent chance) in many southern parts of the region. Northern Malawi is likely to receive above-normal early season rains between October and December, while southern-most Malawi is more likely to receive below-average, and central areas are expected to receive average rainfall in-line with observed El Niño trends.
    Staple production and stocks
    • Second round maize production estimates indicate a projected surplus of 1.5 million MT during the 2014/15 consumption year, which is around a 9 percent increase over last season. Other cereals registered a 7 percent increase, tubers registered a 9 percent increase, and pulses a 7 percent increase over last year’s production. Although the official results of the third round agricultural production estimates have not been released, they are expected to be nearly the same as the second round figures.
    • Based on the recorded 2013/14 drawdown for humanitarian and commercial use the opening SGR stock will be approximately 10,000 MTs of maize, which is 50,000 MT below the recommended level of 60,000 MT. The SGR and ADMARC have not reported any plans to purchase maize. At its current level, future stocks for humanitarian assistance and commercial sales of subsidized maize would put further constraints on the SGR.
    Cash crop production and income
    • Households normally sell cotton between June and August and use some of the incomes for food purchases. In the current season cotton production was below-average due to delayed seed and pesticide distribution at the start of the 2013/14 season. Despite increased prices, normal cotton output in areas that produce this crop may be slightly lower than normal, subsequently reducing household income earned from sales. 
    Irrigated crop production
    • Most districts across the country have reported drier than normal conditions since March, with the exception of the northern region and highlands. According to the Department of Climate Change and Meteorological Services report for April, most of the country experienced average seasonal rainfall amounts. There were a few pockets of below average seasonal rainfall amounts, including Balaka and Neno districts in the southern region. These dry conditions coupled with a reported scale down in the availability of irrigated farming inputs is expected to result in significant production shortfalls between September and December. For most households irrigated crops can provide an additional 10 to 20 percent to their annual food sources.
    Markets and trade
    • Maize prices are likely going to be slightly lower this year in comparison to last year due to the improved maize production levels, which is attributed to good rainfall distribution and the availability of inputs. However, prices in Central Karonga and Middle Shire are likely to increase given seasonal price patterns, continued unstable macroeconomic conditions in the country, and low food supply at household level, which will increase demand on the market. FEWS NET estimates that average national maize prices are likely going to increase by about 20 percent from July to December. Prices in CKA and MSH are likely to increase by approximately 25 percent over the next six months.
    • Informal cross border trade between Malawi and neighboring Mozambique and Zambia is expected to follow normal seasonal trends between April and September. The Ministry of Trade and Industry just announced in July that the maize export ban that was put in place in 2012 will continue. Informal exports are expected to continue, but the continuation of the ban is expected to curb any significant outward flows of maize along with any price increases.
    • The Malawi Kwacha has been consistently appreciating since the start of the tobacco marketing season in April. Inflation has decreased and is down from the average of 27 percent in 2013 to 22 percent in June 2014. However, financial experts are predicting that this appreciation may only be temporary because this year’s tobacco earnings are 9 percent lower than last year and there are significant earning reductions in tea (down 18 percent) and sugar (down 43 percent) earnings as well as suspension of donor funds. The procurement of fertilizer for the national Farm Input Subsidy Program (FISP) from August will also put pressure on Malawi’s foreign currency reserves.
    Labor
    • Generally, agricultural labor opportunities for poor households are expected to follow normal trends during the harvest and post-harvest period between. Labor opportunities will be limited in areas facing localized food insecurity.  However, between October and December households in southern Malawi are likely to face reduced labor opportunities due to an abnormal start of season caused by drier conditions as a result of the El Niño.
    Social safety-net programs
    • The Malawi Government will distribute subsidized inputs through the Farm Input Subsidy Program (FISP), targeting about 1.5 million poor farmers.
    • The Malawi Farm Input Loan Program (FILP) will not be available this year. Since middle and better-off households tend to use the FILP, this could further reduce labor opportunities for poor households
    Most Likely Food Security Outcomes

    During the outlook period (July-December) the majority of poor rural households across the country are projected to face Minimal food insecurity outcomes (IPC Phase 1) due to above-average maize production. However, due to reduced maize crop production in CKA and MSH, household incomes will be lower as a result of smaller crop sales among the middle and better-off households that offer labor. A food security Crisis (IPC Phase 3) is expected among poor households in CKA and MSH livelihood zones between August and December, while in the majority of the country Minimal (IPC Phase 1) outcomes will persist. 

    For more information on the national-level assumptions over this outlook period and the analyses for the areas of concern please download the full report.

     

    Figures Current food security outcomes, July 2014.

    Figure 1

    Current food security outcomes, July 2014.

    Source: Fews Net

    Figure 2

    Source:

    To project food security outcomes, FEWS NET develops a set of assumptions about likely events, their effects, and the probable responses of various actors. FEWS NET analyzes these assumptions in the context of current conditions and local livelihoods to arrive at a most likely scenario for the coming eight months. Learn more here.

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