MALAWI NO ALERT Food Security Update WATCH WARNING August 2006 EMERGENCY

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MALAWI NO ALERT Food Security Update WATCH WARNING August 2006 EMERGENCY ALERT STATUS: MALAWI NO ALERT Food Security Update WATCH WARNING August 2006 EMERGENCY CONTENTS Summary and implications Summaries and timeline .............1 Markets and prices .....................2 Three to four months after the harvest, a majority of households still have food from their Special Focus: Interventions-with own production. According to the livelihood baselines, the majority of households in the emphasis on Kasungu district.....4 poor wealth groups start running out of food in September/October in a normal year, and Macro-Economics ......................5 earlier in a bad year. Although in most of the country, this year can be described as a Appendix 1 .................................6 normal to above-normal year in terms of crop production, there are some exceptions. In parts of Kasungu, Dowa, Ntchisi, Mzimba, Rumphi Phalombe, Nsanje, Chikwawa, Mangochi and Nkhatabay districts, where production was affected by prolonged dry spells and floods, households have already started to run out of food. Most of these households will require some assistance to obtain food in order to make it through this season. Elsewhere, farmers continue selling their crops, and, where possible, are cultivating winter crops. Some local markets, particularly in areas that experienced significant crop failure, are beginning to show an early rise in maize prices, and the rising prices will limit the ability of poorer households without any food reserves to purchase food. Seasonal timeline Current hazard summary • Prices have begun to rise early on some local markets in areas where food production was poor this season. Food security summary The household food security situation this season is much better than it was last season, due to the bumper harvest of various crops across the country. However, there are a few exceptions where crops did poorly due to prolonged dry spells and floods. The Malawi Vulnerability Assessment Committee (MVAC) has determined that these areas are in need of assistance. In some of these areas, local market maize prices are already beginning to show upward trends, and this is a matter of concern because higher prices could worsen the food security situation, especially if timely interventions (e.g., food aid distribution, cash for work programs and input provision) are not carried out. The results of the MVAC assessment were only released late July, and as of yet there have been no official interventions in response to the findings. Food security stakeholders would first like to review the ongoing and planned interventions in the areas affected by dry spells and floods as these interventions were not taken into account in the MVAC analysis. It is anticipated that their inclusion could result in a reduction of the required level of intervention. Prior to the MVAC assessments, reports by various stakeholders, including FEWS NET, pointed to anticipated food security problems in the affected areas. FEWS NET for instance, had prepared a special report on the anticipated future food security problems in Kasungu and surrounding areas in February, after the serious dry spells had just occurred in the area. Some stakeholders, including the government, responded immediately with various types of short-term interventions. The government, in particular, has supported some households with water pumps where irrigation was possible in order to allow some of the affected FEWS NET is a USAID funded activity. Comments or questions regarding this report can be addressed to Sam Chimwaza, FEWS NET representative for Malawi: FEWS NET/Malawi, Off Chilambula Road, Old Town, P.O. Box 30455, Lilongwe 3, MALAWI (Tel) 265 1 754892; (Fax) 265 1 754892; Email:[email protected] Disclaimer: The authors’ views expressed in this publication do not necessarily reflect the view of the United States Agency for International Development or the United States Government. MALAWI: FOOD SECURITY UPDATE AUGUST 2006 households to improve food production to last later into the consumption year. There have also been one-off private food donations in some of these areas. Stakeholders feel the need to review these actions and their impacts so that they can respond in an appropriate manner to the MVAC findings. However, with some households’ capacities to access food dwindling already, time is of the essence and the review should be done as soon as possible before the situation gets out of hand. In most parts of the country, households still have food from own production as a result of the favorable harvest this season. This has resulted in a reduction in market demand for food, especially maize, which in turn has resulted in relatively stable and low maize prices in most of the local markets. Farmers are busy selling various crops to traders and the Agricultural Development and Marketing Corporation (ADMARC). Following the passage of the national budget, ADMARC’s finances have improved and it has intensified its buying activities. This time, ADMARC is buying mainly maize, and as of the end of the third week of August, had purchased about 40,000 MT. In some areas, the ADMARC fixed price has influenced the buying prices private traders offer, pushing them upward; although, in a majority of cases, prices have not gone beyond the MK20.00/kg ADMARC price. These prices appear to be attractive for households that are selling their crops. It is against this background, that the government is warning households not to oversell their maize and limit what they retain for consumption, because such behavior could potentially compromise their household food security later in the season. Traders who won tenders to supply the National Food Reserve Agency (NFRA) with maize continue to make deliveries to NFRA. By the end of the fourth week of August, the NFRA had received about 18,200 MT of the total 22,000 MT awarded contracts. Deliveries for the other tender of 40,000 MT of maize are yet to begin. Markets and prices According to the price data sourced from the Figure 1: Average maize price trends for selected local markets Ministry of Agriculture and Food Security 50.00 (MoAFS), average maize prices in the local markets KARONGA NTCHEU BEMBEKE 45.00 NANJIRI MITUNDU KASUNGU for the first three weeks of August ranged from NSANJE LIWONDE CHINTHECHE MK13.05/kg at Hewe market in the northern region 40.00 MWANZA to MK27.31/kg at Kasungu market in the central 35.00 region (see Figure 1). The high local market maize 30.00 price at Kasungu market is a manifestation of the food security problems in the area emanating from 25.00 MK/kg the poor crop production this season. In the 20.00 northern region, maize prices range from 15.00 MK13.05/kg at Hewe market in Rumphi District to MK23.17/kg at Chilumba market in Karonga 10.00 District. In the central region, maize prices ranged 5.00 from MK15.17/kg at Kasiya market in Lilongwe 0.00 District to MK27.31/kg at Kasungu market in April May June July August Kasungu District. In the southern region, maize FEWSNet/Malawi Source: MoAFS prices ranged from MK15.29/kg at Namwera market in Mangochi District to MK22.83/kg at Liwonde market in Machinga District. Although the highest maize price was registered in the central region, the prices are generally highest in the southern region with a median price of MK20.00/kg, followed by the northern region at MK19.01/kg and then the central region at MK18.65/kg. Some of the markets registered a drop in maize prices in August, while others registered an increase. There are various reasons for this. Supply and demand are affected by a number of factors including whether the households still have food from their own production, which itself is a function of the amount harvested and the time elapsed since the harvest, and these factors vary across the country. Out of the 60 local markets for which data was available, about 42% of them registered maize price decreases ranging from 0.2% at Mchinji market in Mchinji District to 9.6% at Ntonda market in Blantyre District. However, the majority of markets registered price decreases of less than 5%. About 57% of the markets registered price increases ranging from 0.1% at Mpamba market in Nkhatabay District to 59.5% at Kasungu market. The remaining 1% of the markets registered no change in maize prices between July and August. It appears the downward price trend experienced after harvest is beginning to reverse itself, although, it is too early to draw conclusions. 2 MALAWI: FOOD SECURITY UPDATE AUGUST 2006 In some markets, the typical seasonal upward Table 1: Local market maize price (MK/kg) comparison between August 2005 and 2006 trend has almost established itself as shown in Region Market Aug-05 Aug-06 % Region Market Aug-05 Aug-06 % Figure 1. The graph shows the markets where Southern MWANZA 32.10 19.44 -39% Central SANTHE 18.00 17.00 -6% Southern NAMWERA 22.84 15.29 -33% Central NSUNDWE 19.84 18.89 -5% prices are already showing a rising trend. At Central NKHOTAKOTA 25.73 18.65 -28% Northern HEWE 13.50 13.05 -3% Kasungu market, maize prices are rising rapidly. Southern THONDWE 26.64 20.00 -25% Central LIMBE 22.00 21.67 -2% Southern MANGOCHI 25.70 19.39 -25% Central DWANGWA 22.19 21.89 -1% This will negatively affect household food Southern LUCHENZA 28.12 21.50 -24% Central DOWA 18.25 18.29 0% security in the area as most households there Central MCHINJI 21.54 16.60 -23% Central NKHOMA 18.45 18.60 1% Southern NTONDA 21.09 16.27 -23% Central THETE 17.20 17.50 2% depend on the market for food due to the poor Southern BANGULA 23.41 18.15 -22% Central LILONGWE 19.97 20.64 3% Southern LIZULU 20.40 15.85 -22% Northern MZUZU 17.55 18.42 5% crop production this season.
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