Malawi is so desperate for food to stave off a hunger crisis that the government may buy a type of corn that the country mainly uses as livestock feed.
In the southern African nation, millions eat a porridge of ground white corn as a daily meal, but after the worst drought in decades there aren’t enough supplies to feed everyone. The government wants to import 10 times more corn than usual and is ready to buy grain from Europe, where the yellow variety is mainly produced.
The rare decision -- because that part of Africa prefers using yellow corn to feed animals -- comes as the nation’s harvest is set to be 40 percent smaller than two years ago. An El Nino weather pattern obliterated crops from South Africa to Ethiopia, leaving nearby countries fighting for supplies. Malawi has declared a state of disaster and about 50 million people face hunger in eastern and southern Africa, the United Nation’s humanitarian affairs agency said.
"Malawi is not accustomed to this situation, as over the past decade it has acted as a surplus exporter," said Edward George, head of soft commodities research at Lome, Togo-based lender Ecobank Transnational Inc. "Given the shortfall in maize production in Zimbabwe and Zambia, Malawi will need to source the maize from the global market," he said, using another term for corn.
Malawi will struggle to find the 1 million metric tons of white corn it’s seeking for its 17 million people, said Wandile Sihlobo, head economist at the Agricultural Business Chamber in South Africa. That’s partly because South Africa is boosting imports and Zambia has suspended exports until September.
With Malawi facing a second year of falling output, corn prices jumped 67 percent in the past year and reached a record 241 kwacha per kilogram ($8.90 a bushel) in February. Because of the crisis, the government is in talks with Ukraine, Brazil and Mexico to source grain and is considering an exception to a ban on allowing genetically modified supplies, Agriculture Minister George Chaponda said.
The U.S. Department of Agriculture doesn’t expect Mexico to export as much as Malawi needs, while more than two-thirds of the 1.2 million tons of white corn the U.S. can export in total is genetically modified, Sihlobo said. South Africa is also competing for supplies as it seeks 1.1 million tons.
Yellow and white corn prices on the South African Futures Exchange have risen at least 50 percent in the past year.
"The only other option is yellow maize, unless they start substituting for other cereals, other food items," said Jonathan Pound, an economist at the UN’s Food & Agriculture Organization. "It has happened in the past where they mix white and yellow maize in the subregion to produce their maize meal."
While there’s little nutritional difference between the two types of corn, the yellow variety is mostly used in sub-Saharan Africa to feed livestock and poultry, giving a darker shade to egg shells and yolks. Other parts of the world, such as Asia and South America, use the type in some foods. Almost all white corn goes to human consumption in southern and eastern Africa.
Malawi may face another problem. It’s unclear whether the ports of Nacala and Beira in neighboring Mozambique have the capacity to handle the 1 million tons the land-locked country seeks, Sihlobo said. Nacala is expecting to get more than 300,000 tons of corn destined for Malawi, according to Portos do Norte SA Chief Executive Officer Fernando Couto.
Beira has eight bagging machines and can handle 1,000 tons of bulk cargo a day, according to a presentation by Cornelder de Mocambique Sarl, which manages the harbor. To deal with more unloadings, the port has bought another four machines due to arrive this month. It also turned a container freight station into a warehouse to store 10,000 tons of corn.
"Mozambique’s logistics are OK in the north, and the region produces maize too," Ecobank’s George said. "But as Malawi does not usually import large volumes via this route, capacity constraints could slow the flow" and securing financing could also be a challenge, he said.