Like many farmers, Monica Haraba wakes up at 5 a.m. to get ready to harvest her soybean crop on her farmland located on the outskirts of Lilongwe, Malawi's capital. But like last year, she is expecting lower output due to adverse weather, especially drought.

"Because of poor weather conditions, I managed to harvest only 200 bags of soybeans, each weighing 50 kg, during the 2022-23 farming season, compared to 600 bags in the previous season, on my 8 acres (3.23 hectares) of land," Haraba said.

Haraba intends to sell her yield to local companies that process soybeans into finished products including cooking oil, soymeal and stock feed. According to Malawi's Ministry of Agriculture, the minimum farm gate price for strategic crops such as soybean for the 2023-24 season is pegged at 800 Malawian kwacha ($0.46) per kg.

In a country where more than 80 percent of the economy is based on agriculture, farming touches nearly everyone's life in one way or another. Soybean is one of the most important food and cash crops in Malawi as it is a good source of protein, vitamins and vegetable oils.

But low commodity prices have hit the farmers already struggling with drought hard. And so, recent agreements with China to export Malawi's soybeans to the country have been cheered by Malawian farmers and traders. China's huge demand for soybeans can lift producer incomes.

Positive development

Malawi, a Southern African nation, produces an average of 400,000 tons of soybeans annually, with plans to increase this figure to 1 million tons by 2030. This goal aligns with Malawi 2063, the country's long-term development strategy focused on boosting export demand.

During the 2023 China International Import Expo in Shanghai, where Malawi showcased its products and services, more than 39 Chinese companies expressed interest in purchasing Malawian agricultural commodities, including soybeans.

"The mission to China was highly beneficial for Malawi. We received over $140 million in export inquiries from 39 potential buyers interested in purchasing soybeans, cassava and groundnuts," said Deliby Chimbalu, public relations manager at the Malawi Investment and Trade Center.

In 2023, Malawi exported $6.9 million worth of soybeans, a considerable increase from $2 million the previous year, according to the Malawi Government's 2024 Annual Economic Report.

Malawi and China have signed export agreements not only for soybeans but also for other commodities like macadamia nuts and dried chilies. Further negotiations are underway to establish export protocols for tobacco, tea and ornamental fish. The Farmers Union of Malawi (FUM) has praised these export deals, calling them a positive development for the country's agricultural sector.

"The farmers are definitely very happy because we know now that after working hard in our fields and harvesting, we won't face challenges in terms of marketing our produce," FUM President Frighton Njolomole said, adding that the agreement will play a big role in boosting the country's agricultural sector.

The efforts culminated in the approval of the export of a trial consignment of 240 tons from Malawian investment firm Paramount Holdings Ltd. "This is the beginning for Malawi, and with high demand for soybeans from China, this opens doors for local soybean farmers and traders," Paramount's Managing Director Mahesh Ghedhia noted.

Ghedhia further disclosed that his company had signed a contract to export 20,000 tons of soybeans after successfully completing the accreditation process by Chinese authorities, which confirmed the quality of the product for export to China.

Lucrative market

As the second largest economy in the world, China is the largest importer of agricultural produce and one of the most lucrative export markets for Malawian agricultural commodities such as soybeans.

"This shipment opens a door for Malawian farmers and we plan to increase our volumes because the Chinese market is looking for 100,000 tons of soybeans," Ghedhia was quoted by Xinhua News Agency as saying.

According to Paramount, the exports are subject to waivers provided by Malawi's Ministry of Trade and Industry and Ministry of Agriculture, as the produce falls under export restrictions.

Chinese Ambassador to Malawi Long Zhou highlighted the achievements made between China and Malawi through the Preferential Trade Agreement and outlined a roadmap for enhancing bilateral relations.

"The deal aims to cement the partnership between the two countries," Long said.

The Chinese envoy praised the progress made in agriculture, particularly stressing Malawi's success in utilizing the duty-free and quota-free export market access for soybeans, with the first consignment already shipped to China.

The Malawian Government has described the agreement as a game changer that will transform and diversify Malawi's export base, which is currently dominated by tobacco. The country's Minister of Trade and Industry Sosten Gwengwe noted that Chinese authorities are accrediting individual exporters of all eligible commodities to ensure they meet the required standards.

"Those accredited exporters will be given waivers on the export restrictions because they must fulfill the contracts they have signed with Chinese importers," he said.

Agricultural experts believe that China possesses much untapped import potential for soybeans, accentuating the need for Malawi to exploit this market opportunity. If more commercial farmers with large landholdings enter the industry and access the Chinese market, the country's foreign exchange earnings may increase 20- to 30-fold.

According to the United Nations Conference on Trade and Development, soybeans are in great demand worldwide both for the production of protein-rich meals as well as stock feed.

With this high international demand, and especially in China, Haraba and other local farmers are optimistic about the future of soybean farming.

"I want to ramp up production in the next farming season so that I can supply at least 1,000 50-kg bags of soybeans to firms related to the lucrative Chinese market," Haraba said.

(Print Edition Title: Soy Solace)

This article was originally published in ChinAfrica magazine

Copyedited by Elsbeth van Paridon

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