WINDHOEK – The price of maize meal has gone up by 17 percent, while the price of poultry, especially frozen chicken, is also expected to climb.
Namibia’s largest milling corporation, Namib Mills, says the increase in maize meal price is necessitated by the lower than expected rainfall experienced thus far and its effect on crops, while the increase in chicken price is because of the increase in the chicken feed.
Namib Mills, Ian Collard, yesterday told New Era that due to the looming crisis in both the crop production and livestock industries because of the lack of rain, Namib Mills is compelled to increase maize meal prices by 17 percent with immediate effect. This follows in the wake of a price decrease recently of 5 percent. The market regarding maize is currently very volatile, as it is driven by sentiment, weather and the exchange rate.
Collard said chicken prices could also be affected, as yellow maize prices have also increased. Luckily, the price jump on yellow maize was dramatically lower than on white maize. The expected increase can thus be below 10 percent. The final calculations and effect of this have not yet been done due to the current high volatility of prices.
He said pending any rain for the rest of the season, the current expectations for local white maize production in Namibia is below 40 000 tonnes.
The expected harvest for South Africa is not yet clear, as there is no recent crop estimate. Expectations are that the eastern parts will have a good to below average harvest and the western parts and the Free State harvests will be severely negatively affected, excluding crops under irrigation. Luckily, there was a spill-over of 2 million tonnes from the big harvest of 2014 that will boost available stocks for the new year.
Thus expectations are that yellow maize will track import parity levels and white maize will be higher than import parity levels due to the lack of international origin.
“Unfortunately, it is already too late for all the dry-land maize farmers in Namibia, as their planting could not continue to grow during a typical mid-summer drought. According to some South African promoters in this regard, the last week of February is the last chance for salvation of the Northwest Province and Free State to save the predominantly dry-land plantings,” said Collard.
“The tipping point regarding the mid-summer drought was on January 29, when the commodity market, Safex, started to rise dramatically over a two-week period, from levels of N$2 026 ex-Randfontein to a high of N$2 998. This constitutes an increase of N$972 per tonne or 47.8 percent for white maize. These prices exclude transport to mill-door. Luckily, the rise on yellow maize was not as dramatic with an increase of only N$523 per tonne to N$2 550 ex-Randfontein or 26 percent. This lower increase is attributable to the fact that local yellow maize can be more easily substituted with imported products from either Argentina or the USA.
Unfortunately, this is not the case with white maize, as Southern Africa is the only pre-dominantly white maize producing area, while the rest of the world produces yellow maize,” Collard notes.
“We do not expect shortages of both white and yellow maize, specifically for Namibia, as Namib Mills and Feedmaster are already busy to, at least, ensure availability for the next 16 months. Only availability will be ensured, as the price volatility in the soft commodity markets is just too high to fix prices from a risk point of view. We, however, prefer to source our raw materials from South Africa, as we believe that Namibia, as a country, cannot import maize or soya beans as effectively from other continents as South Africa,” he said.
“We urge consumers and retailers not to panic as we expect not to experience any physical shortages. This depends on the current actions taken by us to ensure constant availability. Namibia consumes a very small portion of the South African harvest, thus it is possible to secure availability early in the year. The price expectations are, however, more of a concern and we expect constant high prices until the next harvest, dependant on the rain for late 2015 and beginning of 2016,” he said.