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The Malawi Experience 2001-3

9. Commercial Maize
 
  • 300-400kt thought to be required by both MG & donors


  • MG & donors reckoned on ca 100kt from informal imports from Tanzania & Moz (actually appears to have been much higher)


  • MG Initially (without tenders!) contracted (7-8/02) at cost of ca $90m for 350kt for commercial sale


  • Donors proposed targeted subsidy for ca 30% population, but MG agreed (in camera) with IMF/WB for general subsidy @Mk17/kg (ca 50% subsidy) i.e. cost of ca $40m on budget if all imports sold. Linked to IMF/WB package of ca $70m – donors not happy!!


  • Restriction on quantity allowed per sale (initially 50kg then 250) to limit opportunities for speculative buying by rich, with special arrangements for MG schools, prisons, hospitals etc


  • Deliveries arrived very quickly, suggesting supply from local speculators rather than imports


  • Unexpected efficiency of informal cash trade supplies and low purchasing power has limited sales to ca 25kt. MG cancelled contracts down to ca 230kt but still faces serious financial problem made worse by suspension of DBS


  • Worries about impact on maize market of very high carry-over stocks being addressed by:

    • Increase of SGR to 100kt


    • opening markets to NGOs, faith groups


    • Opening tenders for 50kt to private sector


    • Negotiations for imports supplies to be diverted to other countries & use of local stocks for Malawi programmes


    • Negotiations for sale to other countries aid needs e.g. Zim
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