Increased market demand likely to lead to further staple food price increases

Data from the Agricultural Market Information System (AMIS) shows staple food prices are beginning to increase in most markets across the country. These increases are a result of increased market demand from poor households that have started relying on market purchase earlier than normal due to below average production. However, prices in all reference markets remain below the five-year average apart from Mitundu, a major source market in Lilongwe, where current prices are five percent above the five-year average. 

At 1,763 MT, the current volume of cross border maize imports is 77 percent above last year’s due to increased imports in some areas of southern Malawi where traders are importing large volumes for markets in Blantyre. However, these volumes are still 66 percent below the five-year average. Informal cross border maize exports on the other hand increased by about 14 percent from the previous month due to increasing exports to Tanzania, but these exports still remain 50 percent below the previous year’s volumes.

It is possible fuel price increases may trigger further staple food price increases. The Malawi Energy Regulatory Authority announced a nine percent on average fuel price increase for petrol, diesel, and kerosene effective July 17. This will likely cause an increase in transportation costs for maize and other commodities from surplus to deficit producing areas.

Very poor and poor households in southern and central areas are facing Stressed (IPC Phase 2) outcomes and will transition to Crisis (IPC Phase 3) during the lean season from October to January, when food prices are at their highest and local cereal supplies are at their lowest. Labor demand and wage rates are currently low as most agricultural activities are seasonally limited. Non-agricultural labor demand is also low as most households that hire labor also have reduced incomes. Typical livelihood options available to communities are wetland and irrigated agriculture for areas that have access.