Compared to last year, maize prices in April 2022 were trending 22 to 73 percent above prices recorded in April 2021. While Lilongwe, Phalombe, and Nsanje markets were stable but remained atypically high for the post-harvest period. Between March and April 2022, prices of maize grain increased substantially in most FEWS NET monitored markets, ranging from 5 to 27 percent. Overall, reducing foreign reserves and increasing inflationary pressure, coupled with the ongoing increase in global wheat, oil, and fertilizer prices, is adding significant pressure on the Malawi economy.ĭespite entering the post-harvest period, food prices continue to be atypically high due to several factors, including below-average harvest, the government's announcement of a higher farmgate price, and a general increase in goods and food commodities prices. The RBM also reported an upward revision to the forecasted annual average inflation estimates from 10.4 percent initially indicated to 12.3 percent. Further, on 26th May 2022, the Malawi Kwacha was devalued by 25 percent, triggering additional price increases. The Reserve Bank of Malawi's (RBM) May 2022 Monetary Policy Report indicated that foreign exchange reserves decreased from 1.72 months of import cover in quarter 4 of 2021 to 1.5 months of import cover in quarter 1 of 2022, triggering a deprecation of the local currency. The significantly below-average tobacco production, the top foreign currency earner for Malawi, is expected to restrict foreign currency access. Malawi continues to register price increases in most key commodities such as fuel and fertilizers, resulting in a widespread rise in transportation prices. Malawi's macroeconomic conditions continue to worsen, characterized by seasonally low foreign reserves and increasing inflationary pressure. Overall, the below-average harvest will likely reduce rural household income generation from crop sales and result in an earlier than normal increase in market reliance. Further, cash crop production, such as tobacco and cotton, is reported to be 38 percent and 36 percent below average. In Southern Malawi, crop production was severely impacted and is expected to experience widespread crop production deficits similar to 2015/16 drought, given multiple shocks that significantly reduced cropland available and damaged existing crops. According to the report, food crop production is expected to be below the five-year average for maize (13 percent below), rice (7 percent below), sweet potatoes (14 percent below), and beans (35 percent). According to the Ministry of Agriculture and Food Security (MoAFS) second-round production results, Malawi is expected to realize a below-average harvest for essential food and cash crops due to poor rainfall performance, multiple tropical storms, and limited supply access to agricultural inputs.

Fews malawi