Maravi

Flood market with local wheat, Cottan urges farmers

Flood market with local wheat, Cottan urges farmers
By Chiwoyu Sinyangwe
Tue 11 Jan. 2011, 04:01 CAT

PETER Cottan says Zambian farmers should flood the local market to depress wheat prices which have jumped 60 per cent since the last quarter of 2010. And Cottan says he is shocked by ZNFU’s call for his arrest over his statement on escalating wheat prices in the country. Wheat prices have surged to US $530 per tonne from US $320 at the end of the harvest period last October.

Cottan, the managing director of National Milling Corporation, said owing to the recent projection of about 200, 000 metric tonnes of the recently harvested wheat, the commodity should fetch US $450 per tonne instead of the current spot price of US $530. He said although wheat prices have gone up by 60 per cent, the price of flour was not expected to rise by the corresponding margin because the final consumers could not contain such a price hike.

Cottan said the current surge in wheat prices on the local market could be attributed to farmers hoarding the commodity to force an increase in price.

He said recent indications from Zambia National Farmers Union (ZNFU) that there was no way the country could be talking of a shortage when wheat harvest was done only 60 days ago should be justified by local farmers flooding the commodity on the market.

“My call to the commercial farmers through the Zambia National Farmers Union is that they should flood the market with the wheat so that our members will purchase the wheat so that we stabilise the food and flour prices,” said Cottan who is also the chairman of the Millers Association of Zambia (MAZ).

He claimed that millers and the bakers were absorbing the current high wheat prices which he said were too high to be absorbed by the final consumer of flour products.

Cottan said wheat prices should be reduced if there was a bumper harvest as was the case with maize in last harvest season.

“When you have a surplus, prices should track export parity just as maize has done, and when you have a deficit, the price tracks import parity,” he said. “But when you have prices not coming down when you have a surplus, then it means there is something wrong.”

And Cottan chided ZNFU’s calls for his arrest over his statement on escalating prices of wheat in the country.

Cottan, who also announced that NMC had hiked prices of flour by about K5 000 following the surge in wheat prices, said he was shocked that ZNFU called for his arrest following his statement.

“I believe that I have been a good corporate citizen in the country, I have been serving for the last 23 years and I took this position as MAZ chairman because I wanted to give back to the nation,” he said.

Cottan further said there was need for all industry players to work towards this Friday’s stakeholders meeting to determine the current wheat position in the country.

Labels: KARTELS, PETER COTTAN, WHEAT, ZNFU

posted by MrK @ 2:07 PM