Harnessing Agricultural Trade for Sustainable Development: Malawi
This study is part of a series of UNCTAD publications that focus on upgrading and diversifying specific agricultural sectors of rural economies in developing countries with a view to raising living standards among of smallholder farmers in a context of sustainable development, female empowerment and food security.
Malawi is a Least Developed Country (LDC) where 70 per cent of its population live below the international poverty line of US$1.90 per day. Tobacco has traditionally been its principal export earner, with maize as a subsistence crop.
A decline in tobacco exports due to health concerns has made it imperative to identify other promising agricultural sectors as a means of increasing foreign exchange earnings to support development. In this context, the government has highlighted sunflower, groundnut and soybean as priority sectors.
The three crops offer a range of practical advantages: in crop cultivation through intercropping which adds to soil fertility; in value addition, offering a potential to tap into markets of edible oils and livestock feed; and, in diversifying away from traditional crops such as tobacco and maize, it allows the country to reduce its exposure to market shocks and climate change.
This study analyses the three sectors in terms of opportunities derived from exports of primary and processed products, within a context of regional integration and LDC preferential access to developed country markets.
It provides detailed information on the current and evolving trading regime between Malawi and its close regional partners, with a focus on both formal and informal trade, given that the latter accounts for a significant proportion of the country’s overall trade and notably involves female traders.
The study notes that all three crops offer significant export opportunities:
Soybean is in great demand both for the production of protein-rich meals as well as for livestock feed. GMO-free soybean from Malawi already earns a premium in export markets.
Potential export earnings from groundnuts, grown by poor communities throughout Malawi, are estimated at around US$48.4 million, of which over half is as yet unrealised.
Demand for sunflower oil is growing in Malawi and foreign exchange constraints can encourage processors to source from domestic producers.