Windhoek
The Minister of Agriculture is not pleased by the latest increases in the price of wheat and chicken products announced by Namib Mills and Namib Poultry Industries (NPI) on Monday.
Namib Mills increased the prices of wheat flour, maize meal, Pasta Polana, Pasta King and mahangu by 4 per cent, while a 7 per cent increase has been imposed on chicken. Maize meal, pasta and chicken are staples of the Namibian diet.
Namib Mills put the blame for these increases on the new 5 per cent levy imposed by government on the import of wheat and white maize, as well as by-products and processed products. Previously, the levy was less than one per cent.
Agriculture Minister John Mutorwa says the “increases are not proportionate to the 4 per cent levy adjustment and are therefore not justifiable.” He said the ministry requested millers to provide guarantees that, in case the 5 per cent levy was to be lowered, there would be no further unjustified price increases.
The millers declined to provide such guarantees, giving the impression that even if the levy was waived, millers may yet subject consumers to further arbitrary price increases.
“The ministry takes strong exception to the impression portrayed by a local miller in the media that their price increases are due to the increases in grain levies,” Mutorwa said in response to the announcement by Namib Mills.
“The increase in the levy was done to address an anomaly whereby local grain producers were paying more than grain importers, a situation which discouraged local production. It is important to ensure that not only local producers are promoted, but also to avoid dumping into the Namibian market,” he said.
Making reference to the 17 percent increase in maize prices in February and the latest increase of 4 per cent, he stressed that other costs of production, such as labour and energy did not increase by similar amounts to justify such wholesale increases.
Namib Mills said “discussions and correspondence with the Ministry of Agriculture, Water and Forestry regarding the decrease of the commodities’ levies were not timeous enough to lower these to the recommended 1.4 percent for the current commodity harvesting year in lieu of the current drought.”
“A guarantee was requested by the Ministry from the millers in Namibia not to increase the prices of products for the remainder of the drought in turn for lowering levies to 1.4 percent as recommended,” reads the Namib Mils statement.
Wheat flour and pasta prices were reduced in May this year with pasta prices dropping by five percent and wheat flour by ten percent. Maize meal prices were raised by 17 percent, due to the severe drought in the southern African region and major crop losses.
According to Ian Collard, the CEO of Namib Mills, the supply of raw white maize has increased by 60 percent in the past 12 months, despite prevailing drought conditions. To compound this, import levies have made the price increase unavoidable, he said.
“Of major concern to us is the involvement of government in the private sector on this level. Consultation does not take place as much as it should and decisions by government have a major impact on our production conditions and costs,” he said.
“These levies have now made our pasta products uncompetitive in export markets. Polana Pasta is exported to Zambia, Angola and South Africa,” Collard said.
Namibia has to import wheat that it cannot source locally. Wheat production is stable in the Hardap Region, as it is irrigated. Namibia Poultry Industry implemented a 7 per cent increase in chicken prices in April 2014 and announced a further 7 per cent increase on Monday.
NPI says it is not earning more than the 7 per cent on their price to retailers. While there is no shortage of these commodities on international markets and while global prices remain stable, the exchange rate does not favour Namibian consumers, the NPI noted.