Malawi has started selling much-needed maize to Zimbabwe under an export agreement which includes a US$10 million line of credit.

"We have already exported 90,000 metric tonnes (mt) within the past two and a half months," Patrick Kabambe, Malawi's Principal Secretary of Agriculture and Food Security, told IRIN. "We have received some payments for the maize that has been sent".

Malawi's agriculture sector has had a second successive bumper harvest, making an almost complete recovery from a drought in 2005 that left close to five million people in need of food aid.

This year's maize crop has seen a 22 percent increase over last year's: 73 percent higher than the average for the past five years, according to government estimates. On the other end of the scale, Zimbabwe's economy is struggling with an inflation rate officially at about 4,000 percent, food and foreign currency shortages.

Zimbabwe's maize order has been urgent. "The Zimbabwean government wanted us to supply at least 100,000mt every month; we told them it was not possible in terms of logistics - processing, fumigation etc," said Kabambe.

What remains uncertain is how Zimbabwe's crippling fuel crisis will affect the distribution of the maize once it is inside the country. Aid workers have also voiced concern of the potential "politicization" of food stocks.

The export sales, however, could not have come at a better time for Malawian farmers.

"It has helped push the prices up and benefited the farmers," Kabambe commented, but was unable to say by how much. "The price could vary from supplier to supplier; besides, transport costs from various parts of Malawi would be different, but we are not selling it at a loss - the price has not been subsidized for Zimbabwe."

The Malawi office of the UK-based development agency, Oxfam, recently pointed out that Malawi's maize market was deflating, and about a month ago the staple food had been available for less than 10 US cents per kg in some parts of the country.

Malawi requires around two million mt of maize annually to feed its 12 million people. In 2006 it had a surplus of about 500,000mt and this year there is a surplus of about 1.5 million mt. The high yield has been attributed to a fertiliser subsidy programme and good rainfall.

According to the UN's Food and Agriculture Organisation and World Food Programme, domestic cereal availability in Zimbabwe is expected to be around 1.29 million mt at the end of October, against a total national utilisation of 2.34 million mt - requiring over a million mt to be imported.

In a recent statement the UN agencies noted that apart from the 400,000mt of maize from Malawi, Zimbabwe is expected to import a further 239,000mt of wheat and rice, despite the low level of its foreign reserves.

In addition, an estimated 61,000mt of maize could be brought into the country by informal cross-border trade and in-kind remittances, especially from South Africa, leaving a gap of 352,000mt of cereals to be met by food aid, the two agencies said.