NFRA maize procurement on track – AHCX

The General Manager for AHL Commodities Exchange (AHCX) Mr. Thomson Chipita has said the procurement of maize for the strategic grain reserves is progressing very well and that the exercise is expected to be completed in the coming weeks.

The General Manager said this on Tuesday, 25th September, 2018 during a media briefing in Lilongwe.

He said, “AHCX has this year been appointed by the Government through the National Food Reserve Agency (NFRA) to procure 32,000 metric tonnes of white non-GMO maize for the strategic grain reserves. So far, the exercise is going on excellently and we expect to be finalizing soon.”

On price, Mr. Chipata explained that AHCX is buying the maize from smallholder farmers, traders and farmer organizations at a competitive price of K150 per kilogram from which a 3 percent withholding tax is being deducted.

According to the AHCX General Manager, the Exchange market is guaranteeing to procure on behalf of NFRA quality maize as well as the required volume.

He added, “On the other hand, all suppliers are being guaranteed timely payments after they sell their maize. In addition, we have managed an open and transparent process of identifying the maize suppliers across the country which has incorporated smallholder farmers who before this initiative had no access to this market.”

Mr. Chipata said that AHCX has made sure that there is transparency, integrity and openness in the entire procurement process of the maize such that no section of the society is being marginalized or given preferential treatment.

“All applicants are being treated equally and fairly. Our open and transparent process of registering smallholder farmers with small volumes as well as public invitations for expressions of interest for contracts has helped immensely. Additionally, farmer organizations and cooperatives have been accorded a chance to also participate,” he said.

On delivery efficiency, Mr. Chipata said AHCX system of delivering the maize has made sure that there is no serious congestion at all delivery locations. He said this has been achieved through the efficient booking system which is helping to ensure that only those suppliers delivering in a particular location at a particular time are informed the delivery date.

“Currently the maximum time a truck stays at our warehouses before offloading is 48 hours, otherwise we are offloading within 24 hours of a truck’s arrival,” explained the General Manager.

He however explained that AHCX encountered a slight challenge when it started procuring the maize because some suppliers were bringing poor quality maize which was rejected, but after sensitization, the problem has been minimized because suppliers are now bringing good quality maize resulting in smooth running of the procurement exercise.

Mr. Chipata said, “We had trucks being rejected due to live infestation, weevil damage, high moisture content and poor-quality bags. But now the quality of the maize we are receiving has greatly improved.”

In order to minimize challenges in procuring the maize and to ensure that everyone participate, Mr. Chipata said that AHCX set up a two-tier system for identifying the maize suppliers with one specifically targeting smallholder farmers with not more than 15 metric tonnes (300, 50 kilogram bags) who were required to visit any preferred delivery location to register their names and be allocated a booking date when they were expected to make their deliveries.

He added that the other stream was an invitation for Expressions of Interest which was published and announced in various media houses where traders and large-scale farmers were allowed to apply for contracts for up to 500 metric tonnes each per location.

“AHCX capped the maximum delivery tonnage at 500 metric tonnes in order to ensure that as many Malawians as possible are given an opportunity to participate in the exercise. This ensured that the exercise is not dominated by a few big players in the industry,” Mr. Chipata explained.

AHCX is Malawi’s leading commodity market that links buyers and sellers of agricultural commodities both local and international to transact with an assurance on quality of the product, delivery and payment. This year, AHCX has been trusted and contracted by Government through NFRA to procure 32,000 metric tonnes of maize for the country’s strategic grain reserves.