Malawi is positioned to gain from recent movements in global commodity prices, but analysts warn that volatility in international markets still poses significant risks. This is according to the latest Research Insights on Global Commodity Prices reported this month by the Export Development Fund (EDF).
The report paints a cautiously optimistic picture for Malawi’s economic outlook, especially with the rising prices of precious metals like gold, which have seen a sharp 20 percent increase since January 2025. This surge is already boosting foreign exchange reserves at the Reserve Bank of Malawi (RBM) and giving small-scale miners a chance to earn more.
“Higher gold prices present a valuable opportunity for Malawi to strengthen its foreign exchange position. However, there remains a need to formalise artisanal and small-scale mining to mitigate risks such as smuggling and ensure that miners capture fair value.”
Gold has become a strategic asset for the RBM, not just as a source of profit but as a cushion against inflation. With many central banks globally increasing their gold holdings to shield their economies from currency depreciation, Malawi’s move to invest in gold is seen as timely.
Percy Maleta, founder and executive director of Maleta Gems and Jewels, commended the RBM’s gold investments. “The monetary gains are obvious,” he said in a phone interview. “The gold they bought at around K60,000 is now trading at almost K140,000. That’s a huge return in the short term, but more importantly, it helps shore up our forex reserves.”
Apart from gold, Malawi could also benefit from falling global energy prices, with the reporting of a 19 percent decline in the global energy price index since the start of 2025. This decline could ease local inflation and reduce the cost of transportation and manufacturing.
However, the EDF warns that these benefits might not fully trickle down to consumers due to exchange rate pressures and potential bottlenecks in fuel supply chains. Malawi’s weak kwacha and import dependency still remain obstacles to enjoying the full relief that falling oil prices would normally bring.
In the agricultural sector, the situation is mixed. Arabica coffee producers have a reason to smile as prices have firmed up in recent months, creating chances for exporters to make better gains in premium markets. On the other hand, black tea exports have continued to struggle.
Malawi’s black tea, which is mostly sold through the Mombasa auction, continues to fetch lower prices compared to teas traded in Colombo (Sri Lanka) and Kolkata (India). This pricing gap has raised concerns about the quality and branding of Malawi’s tea exports.
“The gap between Mombasa auction prices and those in Colombo and Kolkata points to the need for Malawi to improve tea quality, secure better certifications, and diversify market access,” the report recommends.
Meanwhile, groundnut farmers are facing tougher times. The EDF report indicates that global prices for groundnuts have been on a steady decline. This development threatens rural household incomes and livelihoods, particularly in smallholder communities that rely heavily on groundnut farming.
To counter this, the EDF is urging greater investment in value addition and agro-processing, which would allow farmers to earn more by exporting processed products rather than raw groundnuts. Such investments can also help reduce the country’s exposure to price shocks in the international market.
As Malawi navigates these complex global economic shifts, experts say the country must take a proactive approach: strengthen its value chains, formalize informal sectors, and build resilience across key industries to turn short-term gains into long-term economic stability.
