ZNFU calls for Cottan’s arrest
By Chiwoyu Sinyangwe
Mon 10 Jan. 2011, 04:01 CAT
ZAMBIA National Farmers Union says Peter Cottan should be arrested over his “irresponsible and unfortunate” statement that bread prices are expected to surge this week due to ‘artificial shortage’ of wheat in the country.
Cottan, who is Millers Association of Zambia (MAZ) chairman, complained that National Milling Corporation (NMC) and other millers were finding it expensive to access the wheat owing to the surge in market prices.
He said MAZ would pass on the cost of the high cost of wheat to final consumers of bread. Cottan, who accused ZNFU of hoarding the wheat prices despite the bumper harvest, called on the government to ban wheat exports being driven by high international wheat prices.
Currently, wheat prices have surged to US$530 per tonne from US$320 at its lowest ebb.
But ZNFU president Jervis Zimba said Cottan’s claims were callously dangerous, irresponsible and aimed at undermining the government’s efforts and those of farmers in ensuring food security in the country.
Zimba said the country had sufficient wheat stocks after the harvest two months ago, and there was no shortage to warrant NMC’s proposal for a 60 per cent hike in flour prices.
He said Cottan’s statement was “very dangerous to the peace of the country” as it was capable of creating anxiety and fear among the public.
“The union is therefore calling for the Inspector General of Police to arrest Mr Cottan for inciting the Zambian consumers and the general public to rise against the farmers and the government on grounds that there is going to be acute shortage of food and imminent unprecedented food price increases,” Zimba said.
“We also demand that Mr Cottan tenders a public apology to the Zambian Government, ZNFU and the farmers of Zambia and withdraw the statement henceforth.”
He also challenged Cottan to make public the minutes of the meeting where all millers met and resolved to increase the price of flour by 60 per cent starting today.
“The Union is desirous to know and establish as to whether this is a general position of all millers or it is Mr Cottan’s personal agenda,” said Zimba.
“The Union would like to warn that it will not sit idle and watch the farmers of Zambia being maligned as a greedy group of people in the public eye. It does not matter whether that person or institution is so powerful or well known…”
Labels: INFLATION, JERVIS ZIMBA, MAZ, PETER COTTAN, WHEAT
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ZNFU accuses millers of profiteering
By Chiwoyu Sinyangwe
Tue 18 May 2010, 07:20 CAT
THE Zambia National Farmers Union (ZNFU) has accused the Millers Association of Zambia (MAZ) of profiteering in the pricing of mealie meal.
ZNFU president Jervis Zimba warned that bumper harvests achieved in the country in the last two seasons risked being reversed for as long as
millers continue to benefit at the expense of farmers.
Zimba claimed that net profits for millers in the country were as high as 78 per cent of total cost and that was exceptionally high by any standards, especially in the milling industry.
“When price sensitivities are run for all maize byproducts, a 10 per cent profit margin can be realised with breakfast meal trading at K35, 000 per bag, roller meal at K22, 000 per bag and bran at K6, 000 per bag,” Zimba said. “Under these conditions, it is evident that current maize marketing arrangements do not benefit the farmer or consumer.”
Zimba, who said ZNFU still believed in liberalised maize marketing mechanism, however, said there was need to review the entire maize marketing programme in the country.
“The farmer is faced with a producer price below the cost of production while consumers are exploited as the retail price do not fall in line with the drastic drop in the producer price paid to the farmer,” he said. “Who benefits then? This begs for a total review of the maize marketing policy environment.”
And Zimba who likened the role of millers to that of ‘briefcase maize buyers’ said the current price imbalance was a threat to recent successes recorded in both seasonal and off season maize output.
“When there is such irresponsible behaviour in the markets, it’s imperative that some regulatory mechanisms are introduced with full participation of all players in the industry,” said Zimba.
“Should this situation remain unchecked, maize production will drop drastically next farming season and the country risks to return to importing maize when the country is best placed to grow more of its kind for exports.”
Labels: JERVIS ZIMBA, MAIZE, MAZ, ZNFU
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Millers to actively participate in maize purchase
By Mutale Kapekele
Mon 03 May 2010, 22:40 CAT
MILLERS Association of Zambia (MAZ) executive officer Harrison Banda says the association will actively purchase maize to ensure that farmers have a market. In a statement yesterday, Banda welcomed the K65, 000 Food Reserve Agency (FRA) maize floor price.
“It should be noted that MAZ members already reduced mealie-meal prices in the last two weeks,” Banda stated. “Our consumers should appreciate that this year’s maize price of K65,000 per 50 kg bag was exactly the same as for last year’s season which saw mealie meal prices being stabilised almost throughout the year, despite an increase in millers’s carrying cost of maize stocks which include storage, fumigation, security and finance charges.”
He said that because of the cost of stocking maize, it would be unreasonable to expect further reductions in the price of mealie meal when the base price of the raw material (maize) has remained constant which will go up with the costs being carried.
Banda said that MAZ was hopeful that with the carryover stocks from last year’s season and the expected bumper harvest for this year, there could be excess supply of maize on the market and depending on the interaction of the market forces of supply and demand, the price of both maize and mealie-meal could go down around June and July to the benefits of consumers.
He said that MAZ would work with other stakeholders to pursue the export markets to enable the surplus maize to be milled and exported as value added products, thereby creating additional demand for the farmers’ maize and encourage them to grow more crop in the next season.
Labels: FRA, HARRISON BANDA, MAIZE, MAZ, MILLERS
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Govt won't allow importation of mealie meal - Mutati
Written by Kabanda Chulu
Tuesday, April 28, 2009 3:56:57 PM
GOVERNMENT will not allow the importation of mealie meal into the country, claiming that prices will stabilize soon due to the harvest of early maize crops.
Last week, the Zambia Competition Commission suggested that government should allow the importation of mealie meal to help reduce prices since the Millers Association of Zambia (MAZ) were operating like a cartel, hence exploiting consumers through excessive pricing of mealie meal.
But commerce minister Felix Mutati has said the importation of maize through the Food Reserve Agency (FRA) was enough to cater for the deficit.
He said government also wanted to utilize the existing local capacity of millers, who were creating jobs and making money to re-invest in the country.
"It will not make sense to import mealie meal especially that there is brand loyalty, for instance, others just eat mealie meal from Choma Milling but if we import, we may create apprehension and people will resist since there will only be stocks of 'xyz' brands," said Mutati.
"Also when we import mealie meal, people will lose jobs and there will be need to import by-products like stock feeds, so where are we going to end? An importer of finished products and yet we have the capacity but soon there will be some early maize harvest and by next month many other farmers will come on board to correct the situation."
Despite the importation of thousands of metric tonnes of maize by the FRA, which they later subsidized to members of MAZ, mealie meal prices in the country are still high with a 25 kilogramme bag of breakfast costing at an average of K70,000.
This development prompted the Competition Commission to ask government to allow imports so that prices could come down in order to protect Zambian consumers and to afford buyers a wider choice for the products.
Labels: FELIX MUTATI, MAZ, MEALIE-MEAL, ZCC
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Nationalisation of mines opposed
January 8, 2009
The Mine suppliers and contractors Association of Zambia says nationalizing the mines is not the answer to the current problems in the sector. Association president Fanuel Banda is of the view that mines can still operate buoyantly in private hands.
Mr. Banda said Zambia has learnt a number of lessons from nationalizing industries and can therefore not afford to gamble with mining conglomerates. He observed that the benefits of having mines in the hands of the private sector are enormous.
Mr. Banda told ZNBC in the Copperbelt Province mining town of Kitwe that Government should instead address some of the grey areas affecting the mining sector.
He has advised Government to revisit the laws on the Investment Act which should dis-allow the externalization of money raised from the mining industry.
ZNBC
Labels: MAZ, MINING, NATIONALISATION
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MAZ urges access by all millers to cheaper FRA maize
Written by Fridah Zinyama
Wednesday, December 31, 2008 10:05:39 AM
SOME milling companies have disclosed that they will only effect a reduction in mealie-meal prices once they access cheaper maize being offered by the Food Reserve Agency (FRA).
In an interview, Millers Association of Zambia (MAZ) vice-chairperson Peter Cottan said the milling companies which were currently selling mealie-meal at reduced prices had signed a contract with FRA which was offering maize at a K55, 000 per 50 kilogramme bag of the commodity.
“We will be meeting FRA this afternoon (yesterday) to discuss the way forward concerning the mealie-meal prices,” he said.
Cottan said all millers would like to be included in the package that FRA was offering as that would assist them reduce mealie-meal prices.
Last week, FRA chairman Costain Chilala had announced a reduction in maize prices from K60, 000 to K55, 000 per 50 kilogramme bag.
Chilala stated that all willing millers would be supplied with FRA maize at 100 per cent mill requirements at the current price.
He said participating millers would sign a legal document to further lower mealie-meal prices.
Chilala said the agency would also buy available maize from the local market at its offer price to meet increased demand for the commodity. This would be in addition to the planned imports of 100,000 metric tonnes of the commodity.
Labels: COSTAIN CHILALA, FRA, INFLATION, MAZ
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MAZ isn’t a regulatory authority to control mealie-meal prices – ZCC
Written by Fridah Zinyama and Chiwoyu Sinyangwe
Friday, November 14, 2008 8:02:16 AM
ZAMBIA Competition Commission (ZCC) has said the Millers Association of Zambia (MAZ) is not a regulatory authority to control mealie-meal prices pegged by its members.
And Agri-Africa has warned that the Southern African Development Community (SADC) states are headed for a serious food crisis as South African grain farmers are likely to further scale down maize production.
Meanwhile, the Zambia National Farmers Union (ZNFU) has said it is still studying MAZ's statement that Zambia is currently facing a grain crisis because some local farmers objected to the importation of maize early enough when it became apparent that the country was headed for a maize deficit.
ZCC executive director Thula Kaira observed that the control of prices by MAZ was an offence under Section 10 of the Competition and fair Trading Act CAP 417 of the Laws of Zambia.
"The following practices conducted by or on behalf of a trade association are declared to be anti-competitive trade practices if, (a) unjustifiable exclusion from a trade association of any person carrying on or intending to carry on in good faith the trade in relation to which the association is formed; or (b) making of recommendations, directly or indirectly, by a trade association, to its members or to any class of its members which relate to - (i) the prices charged or to be charged by such members or any such class of members or to the margins included or to be included in the prices or to the pricing formula used or to be used in the calculation of those prices," Kaira explained. "The terms of sale (including discount, credit, delivery, and product and service guarantee terms) of such member or any class of members and which directly affects prices or profit margins included in the pricing formula."
Kaira stated that the current situation in the milling industry would hamper the government's efforts to reduce poverty in the country if organisations such as MAZ continued with anti-competitive pricing strategies.
"The anti-competitive pricing strategies which are being disguised as ‘recommended prices’ may in fact be prices above what would obtain if a competitive pricing regime was left to operate at millers' level - and not at the retail trade," he observed.
Kaira explained that where there was a production-supply distortion, it would naturally spill over into a distribution-retail distortion.
"The problem of high prices of mealie-meal is not because the traders are not adhering to a recommended price," he stated. "The problem is that such recommended prices were not there before until last week when the MAZ members uniformly increased the price at the same time and then blamed the retail trade for the high prices."
Kaira stated that the long-term bottle-neck factor to price stability of mealie-meal was MAZ, which was operating like the Organisation of the Petroleum Exporting Countries (OPEC), a production and price cartel.
He stated that to a large extent, millers control the upstream and downstream dynamics of maize and mealie-meal and thus they were the ones who had the solution to the determination of the market price of mealie-meal.
"With the reduced fuel prices, which are likely to reduce further, there would appear to be no justification for the latest increase of mealie-meal," he stated.
Kaira stated that MAZ needed to review its objectives and realign them with competition principles.
"Considering the high number of milling companies, closer cooperation through MAZ is likely to forestall competitive pricing in maize meal," stated Kaira.
And Agri-Africa, a South African-based group of agricultural consultants, stated that farmers in South Africa where most countries are looking up to as a possible solution to the current grain crisis were expected to cut down on maize output on account of the current financial crisis.
"Rising production costs, lower commodity prices and further consequences of the ongoing global financial crisis have forced South African grain farmers to further scale down the production of maize," Agri-Africa observed. "If South Africa fails to produce enough maize during the current season, it will be a recipe for a humanitarian catastrophe for many of its neighbouring countries."
Agri-Africa stated that both the government and consumers would have to foot the expected rise in the price of maize in the local market which it says would at least be up by another R1,200 (about US $116) a tonne or more if the country has to import maize next year.
Agri-Africa further stated that producers had no other choice but to scale down production from 2.8 million hectares this season to two million hectares in the coming season as the sector could not sustain another surplus maize crop at lower export parity prices.
And ZNFU president Jervis Zimba yesterday said the union was still studying the matter before they could issue a statement.
On Tuesday, the ministries of agriculture and commerce attributed the current increase in prices of mealie-meal to some millers who they said were hoarding maize stocks to embarrass the government.
But on Wednesday, MAZ chairman Caleb Mulenga described the government's claim that millers were hoarding maize as a lack of appreciation of how the industry works.
Mulenga said counter accusations would not solve the current problems of high prices of mealie-meal.
Mulenga said despite millers in the country questioning this year's crop forecast, some interest groups like ZNFU opposed the importation of maize, saying it would hurt the small scale farmers who at the time were active in the grain market.
But agriculture permanent secretary Professor Isaac Phiri insisted that high prices of mealie-meal were being caused by millers who only wanted to buy maize from cheaper sources.
Labels: CALEB MULENGA, INFLATION, MAZ, MEALIE-MEAL, MILLERS, ZNFU
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Millers association accuses traders
By Times Reporter
THE Millers Association of Zambia (MAZ) has accused traders who are selling mealie meal above the association’s stipulated prices of exploiting consumers.
MAZ executive director, Harrison Banda said in Lusaka yesterday that MAZ had stipulated maximum prices for regions in Zambia and traders should abide by that.
Mr Banda said the recommended mealie meal prices ranged from K39,000 to K42,000 for a 25 kilogramme bag of roller meal and from K50,000 to K52,000 for breakfast for Lusaka retailers.
“These are the retail prices prevailing at the official MAZ millers’ outlets, including major retail shops.
“Therefore any trader selling mealie meal at prices well above the MAZ millers’ prices, although operating in a liberalised economy, would be trading unfairly to consumers,” Mr Banda said.
A snap survey in Lusaka revealed that the price of mealie meal had shot up to about K61,900 per 25 kilogramee bag of breakfast while roller meal is being sold at K51,000 for a similar quantity
The Zambia Consumer Association (Zaca) separately condemned the increase in the prices of mealie meal and called on the Government to intervene to ensure that the prices were reduced.
Zaca executive director , Muyunda Ililonga said the increase of mealie meal prices was pure exploitation of the consumers.
Mr Ililonga said in an interview yesterday that it was sad that market forces in Zambia always favoured the traders and not the consumers.
He said the situation if left unchecked could create despondency in the country hence the need for the Government’s quick intervention.
“Government has a responsibility to the people and must ensure that the staple food should not go beyond the reach of the majority. This is politically dangerous as it can bring about despondency,” he said.
Mr Ililonga said the peasant farmers had always been complaining of the low prices at which they sold their maize and it was unjustifiable for the millers to say that the maize prices were too high.
He said there was no real competition on the Zambian market in the sector and accused the millers of teaming up.
Labels: MAZ, MEALIE-MEAL
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KCM hopes for emergence of stable national leadership
By Mutuna Chanda in Chingola and Mwila Chansa in Kitwe
Sunday August 31, 2008 [04:00]
KONKOLA Copper Mines (KCM) has said it is hoping for the emergence of a stable leadership that will ensure consistent policy regime to take over from late President Levy Mwanawasa. And Millers Association of Zambia (MAZ) vice-president Peter Cottan assured of continued investor confidence in the milling industry despite the current political situation prevailing in the country. KCM communications advisor Sam Equamo in an interview on Wednesday said it was important for investors to be assured of a stable economy and future.
"KCM hopes for a smooth transition and that the legacy that President Mwanawasa has left of investor friendly policies, of stability in government, of stability in fiscal policies is carried forward," Equamo said.
He said Zambia's economy was improving and that only stability would guarantee continued growth.
Equamo said there was need for Zambia to address the true cost of electricity.
He said the costs of electricity and fuel were among the major factors in KCM's production process.
"We are the largest consumers of diesel in Zambia, especially in the open pit mines," Equamo said. "At the current prices of copper, maybe we can take it in our stride but when prices go down we might have a problem.
On our part, we are trying to bring down the cost of production. Power also impacts a lot on our production process and that is why the entire economy needs to address the true cost of electricity.
If the generators of the power think that they have to increase the prices of electricity, it is up to them but we have to bear in mind the consumers of this electricity. How far do we have to go before we break the back of the consumer?"
Equamo said the new smelter at Nchanga mine in Chingola could be ready by the end of September.
Equamo said some parts of the smelter had been commissioned while others were undergoing test runs and that the whole operation would soon be ready.
Earlier, The Post was taken on a familiarisation tour of KCM operations.
And speaking in Kitwe at a press briefing on Friday, Cottan who is also National Milling managing director said investors in the industry had full confidence of the current government.
He said the government’s policies were conducive for investor climate and business, adding that he did not foresee any major changes.
Cottan also said what would determine the price of maize in the period leading to the next harvest was the cost of fuel and transport.
He noted that in the last 46 weeks, there had been two increments in the price of fuel coupled with the removal of subsidy on the commodity but the prices of mealie meal had not gone up to the same extent.
He observed that prices of mealie-meal were gradually increasing because of the increase in production costs.
On the prices of flour, Cottan said the main raw material (wheat) was bought from commercial farmers in United States dollars.
Cottan said the prices of stock feed had been affected by the deficit of Soya.
He said the estimated annual consumption of soya beans per annum was about 65,000 tonnes but that there was only an estimated 45,000 tonnes of the crop that was produced this year because of floods and shortage of the seed.
Cottan said there was need to import 20,000 tonnes to get the country through to the next harvest at the end of April 2009.
Labels: KCM, MAZ, PRESIDENCY
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High cost of feedstock a danger to small-scale producers
By Fridah Zinyama
Wednesday May 28, 2008 [04:00]
THE Poultry Association of Zambia (PAZ) has said many small-scale producers of poultry products might drop out of the sector due to the high cost of feedstock on the local market. And Millers Association of Zambia (MAZ) vice-chairman Peter Cottan said the livestock sector will find it difficult to survive this year due to the high cost of production of feedstock.
In an interview, PAZ executive manager Mathew Ngosa said the high cost of feedstock had created uncertainty in the sector as the main components of feedstock, soya and maize, were currently very expensive.
"The high cost of feedstock is becoming a danger to the small scale producers and we have to find means and ways in which to prevent this before the small players are wiped out," he said.
Ngosa said soya beans prices had over the last few months increased from US$320 to US$710 per metric tonne, which was a very drastic increase.
"Even with prices this high, the millers are not making a large profit margin and they are sacrificing to keep the sector going," he said.
Ngosa said millers were shouldering more of the costs on behalf of the poultry farmers and that it would be hard for them to continue doing so.
"There has been a 100 per cent increase in the prices of raw materials used to make feedstock, meaning that their gross margins have been affected and they are barely breaking even," he said.
Ngosa noted that there would be a shortfall of about 30,000 to 40,000 metric tonnes of soya beans this year because not much had been grown.
"There is an indication already that there will be no relief for the livestock sector this year," he said. "This is going to translate into high prices for the end products like chickens, eggs, beef, pork and mutton."
Ngosa said to encourage farmers to grow more soya beans, the players on the market were prepared to pay the export price for the commodity to enable the farmers realise a profit from their produce.
"The millers are also considering importing soya beans but with the food crisis, it will be difficult to find the soya and when it is found, it might even cost more," he said.
And Cottan observed that this year would be very difficult for the livestock sector as production costs were likely to skyrocket.
He explained that currently, the soya beans produced by farmers was not enough to meet local demand.
This marketing season, the minister of agriculture, announced that soya beans production had increased by 2.98 per cent from 55,194 metric tonnes to 56, 839.
Cottan said the price of soya beans on the local market had already reached the import parity.
"Last year, we were buying a bag of soya beans at K30,000 but the same bag is costing K100,000 this year," he said.
Cottan said the millers were thinking of importing but that the prices were also likely to be very high.
However, Cottan expressed optimism that the high prices would encourage farmers to grow more soya beans to sustain the local demand and make considerable profit from their produce.
Labels: FEEDSTOCK, MAZ, PAZ, POULTRY
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