Policing our mealie-meal
By The Post
Fri 22 Mar. 2013, 14:00 CAT
Jamas Milling managing director John Coutlis blames the current shortage of mealie-meal on weak monitoring mechanisms by law enforcement agencies. Coutlis accuses law enforcement agencies of allowing rampant smuggling of mealie-meal to neighbouring countries.
True as it may be that the current shortage of mealie-meal is caused by illegal exports to some neighbouring countries, law enforcement agencies are not in a position to stop it. This is not a new problem. This problem has been there from the 1980s. All sorts of check-points were put along our borders to try and stop the smuggling of mealie-meal. Even songs were sung to discredit smugglers of mealie-meal. But the smuggling continued.
We don't think the demand for Zambian mealie-meal in our neighbouring countries is in itself a bad thing. It does offer an opportunity to our farmers and millers to increase their market. There is a bigger problem than this: Zambian maize and mealie-meal are highly subsidised. We are subsidising both production and consumption. We have subsidised fertilisers and other inputs. And the maize that is bought by our millers is sold to them at a subsidised rate.
This, in itself, means that Zambia is subsidising the consumption of maize meal in the neighbouring countries. For a very long time, the Katanga Province of the Democratic Republic of Congo has been dependent on Zambian maize and mealie-meal. There are also substantial amounts of mealie-meal that go to Angola. Our subsidised fertilisers get to Malawi and other neighbouring countries.
In our planning, there is no provision for subsidising our neighbours. We are planning our maize stocks and mealie-meal supply on the basis of our population without taking into account Katanga and eastern Angola. Any increase in demand across our borders, or even within our country itself, can cause serious shortages of mealie-meal.
But policing our borders is not the solution. Even if we wanted to, we have a very long border with our neighbouring countries which is not possible for us to police. The solution to this problem lies far beyond law enforcement. It is an economic problem that needs economic solutions. At the rate we are subsidising our maize and mealie-meal, it doesn't make economic sense for the Katangese and others to engage in production of maize. Why waste their time and money when they can get the mealie-meal cheaply from Zambia? It doesn't matter whether the mealie-meal is smuggled to them or not. What matters to them is having the mealie-meal.
The solution lies in making the cost of producing maize and the prices of our mealie-meal economic and competitive. This demands, among other things, the removal of subsidies from maize production and mealie-meal consumption. But is this possible in our current situation? Our answer is a categorical no. We are not in a position right now to arbitrarily remove maize and mealie-meal subsidies.
To do so will first require us meeting certain prerequisites. It demands crop and foodstuffs diversification. We need to wean off our people from excessive dependence on maize meal. When this is done, we can then start reducing or totally removing subsidies from maize production and mealie meal consumption. When this is done, those who engage in maize and mealie meal production will have the right to sell their maize at the market price to the Democratic Republic of Congo and other neighbouring countries. Exporting subsidised mealie-meal doesn't make economic or financial sense when the whole issue is viewed from the interests of the nation as a whole. It may make sense and appear to be very profitable at an individual trader level, but the nation is losing out.
We love our neighbours but we don't think we have the capacity to feed them every year with subsidised mealie-meal. Some of them are actually very rich countries with more resources than ourselves. Why should we subsidise their mealie-meal consumption? One can sympathise with fertilisers being smuggled into Malawi because that country is relatively poorer than us but with a population that is equal to ours to feed. The smuggling of fertilisers into Malawi may be out of necessity or need. But the same cannot be said about the smuggling of mealie-meal into Katanga or eastern Angola.
Bold decisions will need to be taken over this issue. We have to introduce our people to other foodstuffs that are available in our country and are cheaper to produce. Let's teach our people to start looking positively at rice consumption. It is much easier and cheaper to feed a large population on rice. If Asia was as dependent on maize meal as we are, many of the citizens of that region would be dying from hunger every year. It is much cheaper to produce rice than maize. Rice doesn't need fertilisers and other expensive inputs that maize needs. And every region of our country has the capacity to produce enough rice to feed its inhabitants and have a surplus for export. Probably in that way, our neighbours may also learn to eat rice and in that way create a market for our rice growers.
We also have crops like cassava, millet, sorghum, sweet potatoes and so on and so forth that our people can turn to and reduce their dependence on maize meal.
But the movement away from maize will not be spontaneous, it has to be a guided one. In the first place, our people's movement to maize meal was not spontaneous, it was guided. This country has not always been dependent on maize meal. Maize meal is something that has been foisted upon our people by the commercial farmers who accompanied the mining activities on the Copperbelt.
There is a huge market for maize in our region and in the world. Let us exploit that market by producing maize in the manner that is commercially and financially viable. Let us come up with a system that will help us phase out subsidies to maize production and consumption. We understand the political sensitivities that are tied to mealie-meal. And already, there are some political vultures that are without shame, trying to make political capital out of the mealie-meal shortages that some of our towns have been experiencing. Politics will always be there around mealie-meal if it remains the sole staple food for our people.
And this should always be borne in mind when dealing with mealie-meal. The changes that we are advocating should take these political realities into account.
Labels: JOHN COUTILS, MEALIE-MEAL, MILLERS
Read more...
Opposition working with millers to undermine govt - Musenge
By Abigail Chaponda and Misheck Wangwe
Thu 21 Mar. 2013, 14:01 CAT
COPPERBELT minister Mwenya Musenge says the shortage of 25 kilogramme bags of breakfast mealie-meal in most parts of the country could be a political ploy by some millers and opposition political parties working together to undermine the government.
And Musenge says he is disappointed with some police officers especially those manning road blocks and border posts for allowing smuggling of mealie-meal.
During a tour at Roan Antelope Milling on Tuesday, Musenge said possibilities of some partisan individuals playing tricks to paint a picture that the government was not working, could not be ruled out.
He said there were individuals wanting to undermine the government to gain political mileage.
"As far as we are concerned, milling companies are producing mealie-meal and the country has enough. The question is: where it is going? There is a puzzle that needs to be undone. There is something seriously wrong and we are making headways on these issues," Musenge said.
"These people think we don't know, we are aware of their plans. Some opposition political parties and some millers and some foreigners have come on board as well and are working together. They want to buy out mealie-meal in the Copperbelt because it is a strategically strong political province to make an impression that the government has failed so that they can vote the PF government out of power. Dr Kenneth Kaunda was removed from power because of the mealie-meal crisis and this is what these people are planning."
He said he had visited all the milling companies on the Copperbelt and found that there was plenty of mealie-meal and that he did not understand how the country could be experiencing shortages when the commodity was available in the country.
And Musenge said he was aware that some men in uniform were receiving kickbacks and conniving with some milling companies to allow them smuggle mealie-meal out of the country.
"We are also investigating police officers especially those manning road blocks and border posts. They are corrupt because they are receiving bribes and allowing the smuggling of mealie-meal. These people are not patriotic and once they are caught, they will be dealt with severely," he said.
Musenge said police officers should love their country more than anything easy because allowing smuggling of the staple food meant that they were killing the nation.
He said if police officers had failed to perform their duties, PF had patriotic members who were more than willing to perform their duties by intercepting smugglers.
"PF has patriotic members who are more than willing to work for their government, President and party to correct the situation. If police officers don't want to work, PF members can work. It is unacceptable for a country to run out of mealie-meal when millers are producing enough for the country and exports," said Musenge.
And Antelope chief executive officer Emmanuel Efstahiou confirmed that some millers were loading mealie-meal at night and exporting to other countries.
"It is true that mealie-meal moves at night when others are not watching. The government should do something about this situation because this is what is causing the shortages," said Efstahiou.
On Monday, Jamas Milling managing director John Coutlis blamed the current shortage of mealie meal on weak monitoring mechanisms by law enforcement agencies.
Coutlis accused law enforcement agencies of allowing rampant smuggling of mealie meal to neighbouring countries.
Meanwhile, police on the Copperbelt have impounded over 600 bags of mealie-meal at Kasumbalesa border destined for the Democratic Republic of Congo.
Police officers deployed at Kasumbalesa have also impounded about 10 trucks laden with mealie-meal and maize.
Police sources yesterday disclosed that the Copperbelt command had deployed over 150 officers to curb smuggling which had caused shortages of mealie-meal in most towns in the province.
"The operation at Kasumbalesa border started on Tuesday and it will go on for some time because we want to end this smuggling problem. It is an open secret that the border is porous and these traders and millers have taken advantage of that and they have been transporting the commodity in huge quantities. It is shocking to see bulks of mealie-meal that illegally enter Congo and these traders are saying it's because of huge demand and good prices in that country. One bag in Congo DR costs over KR100," a police source said.
The sources said police had sealed off the border to end smuggling as the issue of mealie-meal had become sensitive.
The source said many millers had agents and secret depots at the border selling the commodity for them.
Labels: MILLERS, MMD, MWENYA MUSENGE, UPND
Read more...
Millers and their prices
By The Post
Fri 11 Jan. 2013, 14:00 CAT
The enjoyment of a decent standard of living is frustrated, on part of the poor, when there is
an exorbitant and constant rise in prices of basic foodstuffs.
There has been a constant rise in the prices of foodstuffs, especially mealie-meal. While this rise may not affect very much the small minority of well-off people, it affects dramatically the majority of the common people and in a special way the immense crowd of the poor. This increase of prices is again provoked by the pressure of an artificial shortage created by millers, traders.
And this price increase of some food commodities has not been matched by the corresponding increase in wages and prices for goods produced by farmers, as would be logically expected.
The right to live a dignified life can never be attained unless all basic necessities of life, including food, are adequately and equitably available to everyone.
We expect government bodies to have sound policies over the sale and pricing of essential foodstuffs. We need to provide food at prices which both give a just return to farmers, millers and are reasonable to consumers.
Economic justice requires that each individual has adequate food to survive, to develop and thrive. With the current high prices of food, there are many people who each day cannot meet the basic food requirements necessary for a decent human life.
And as we have consistently pointed out, it is a strict duty of justice and truth not to allow fundamental food needs to remain unsatisfied.
The current food supply system is inadequate, chaotic, irrational and is likely to lead to bigger problems in future. Michael Sata's government has inherited this system from the previous regimes. It is not a system that this government should retain. It is something that this government should strive to change because it is a system that has not worked well, that has not helped to ensure food security in our country.
It doesn't make sense for the government to retain policies that every year require the President of the Republic to police mealie-meal prices and threaten those who maintain high prices with all sorts of sanctions. The threats that are being issued by Michael to millers are understandable and may be justified. But they are not new. Michael is not the first president of this country to deal with millers in such a way. It is such problems that in the 1980s forced the UNIP government of Dr Kenneth Kaunda to nationalise milling enterprises. But did it work? The answer is a categorical no.
It didn't work. Why? Probably because nationalising the milling enterprises did not address the fundamental issues that gave rise to this perennial problem. Mealie-meal shortages continued despite KK nationalising the milling industry. Every president of this country has had to meet millers; do a deal with some millers. But is this the best way to deal with the problem?
A more stable, permanent solution must be found for this serious problem. The total failure of the initiatives that have been taken by all the governments and leaders who have presided over the affairs of this country is today more evident than ever.
There is a great danger that government policies, if not combined with clear social concern, will bring socio-economic deprivation.
Our excessive dependence on maize meal is proving problematic and needs to be addressed. At the current cost of producing maize, it is impossible, unrealistic and irrational not to move towards serious crop diversification. We have other grains like rice, sorghum and even cassava that can give us the needed starch at a relatively low cost or price.
Every year we are subsidising the production of maize by not less than US$300 million and buying maize from farmers at KR65 per 50kg bag and reselling that to millers at KR60. For how long should we continue doing this?
Here the issue is not whether we should subsidise maize production and consumption. The issue is whether we can afford to do so or not. If we have a lot of money and we can afford to spend it in such an irrational way, it's fine. But if we don't have that type of money, then there is a problem and we must start considering sensible alternatives.
We insist that it is time we started moving away from this excessive dependence on maize meal and start to teach our people to eat cheaper grains like rice. There is a lot of rice in the country, but it will require a lot of work to make our people accept it as a staple food that is just as good, if not better than, maize. The majority of the world's population depends on rice. What harm will it do us to join them?
Moreover, we shouldn't cheat ourselves that we have always been dependent on maize meal for our survival. Maize meal is a new thing to us. It is not that old in this country. It is something that came in strongly with mining and urbanisation. The same way we became dependent on maize meal, we can become dependent on rice and other grains and sources of starch. But this will require some effort from government and other agencies. The Zambian people need to be prepared for a future that is not dependent on maize meal, but on other foodstuffs which we can grow cheaply and provide to our people in abundance. In addition to rice, sorghum, millet and cassava, we have sweet potatoes and other tubers and nuts.
The world prices for maize are continually rising and it will soon become very difficult to force our farmers to sell their maize locally at such low prices instead of them exporting. We are producing enough maize and mealie-meal, but the good part of it goes to Congo and Angola. Smuggling will be impossible to stop given the nature of our borders. And as long as the price across the border is good, smuggling will not stop. And with smuggling, shortages will continue. Good prices across the border will also push millers to continually attempt to increase their margins. This will mean every year, every now and then, the president will have to blackmail millers to reduce their prices. Is this the way to run an economy? Is this the most rational way to manage the food security of our people?
Labels: MEALIE-MEAL, MILLERS
Read more...
Sata to meet millers
By Henry Sinyangwe
Mon 07 Jan. 2013, 14:00 CAT
MILLERS will today meet President Michael Sata to discuss mealie-meal prices, according to sources.
Sources said the millers want to raise issues of mealie-meal price controls which had the potential of harming the farming sector. And Millers Association of Zambia president Allan Sakala remained mute on the meeting.
Sakala said the millers had heeded to President Sata's directive to all millers to reduce wholesale prices to KR50 (K50,000) or less.
"From the millers' perspective, we have decided to comply with the presidential directive of pegging the wholesale price of a 25kg bag of mealie-meal at K50,000 (KR50) . We decided to do this on Friday," Sakala said.
He said the government should closely monitor the prices at the wholesale and retail stages to ensure that consumers are not exploited.
Sakala said retailers were only allowed a KR3 (K3,000) increment in view of transportation costs.
"We will be engaging government to see to it that they closely monitor the traders. As millers, we are just producers of mealie meal; we are not supposed to be doing the selling, and we do not want to shut out the traders," he said.
Agriculture minister Emmanuel Chenda called on millers to open up additional outlets to counter the problem of traders who the millers have blamed for the high mealie-meal prices.
President Sata warned millers that government would re-introduce price controls if they continued to exploit consumers by selling mealie-meal at K80,000.
He warned that any retailer or miller selling mealie- meal at more than 50,000 risked having their licences revoked.
Labels: MEALIE-MEAL, MICHAEL SATA, MILLERS
Read more...
Wheat, flour imports hurting millers
12/11/2011 00:00:00
by Tafadzwa Musarara
THE primary duty of any government in the democratic world is to afford its citizenry capacity for the acquisition of goods and services that meet their basic needs. Staple food tops the list.
Since last quarter of 2008, the government of Zimbabwe liberalised importation of basic foods, in particular maize meal and wheat flour. This move was meant to rescue the dire situation that obtained then. It must be recorded that, since introduction of multiple currency, local millers have not increased prices of maize meal and flour as confirmed by the NIPC and the Central Statistics Office.
The nation, from 2009, has been experiencing incremental growth in maize output and the local millers have been dutifully supplying the local market with staple food despite facing unfair and steep competition from cheap imports. The demand of wheat flour, mainly baker’s flour, has gone down in the last three years due to availability of other alternative starch products on the market.
Currently estimated national monthly demand for flour is 17,000mt (from +32,000mt in 2007) against an installed current capacity of 42,000mt. Flour imports are mainly coming from Turkey and Mozambique and our country import regime system is painfully weak in enforcing pre-shipment inspections and import permit management. Imports, by their nature, must serve to augment local production not to substitute it.
From 2008, the milling industry has seen closures of more than 240 millers, mainly black-owned small to medium scale millers. In 2007, the Zimbabwe milling industry had the highest miller per capita in Africa, which is essential in attaining food security and also in firmly placing the staple food production in the hands of the indigenes.
Continued uncontrolled imports of wheat flour are not only going to hurt millers but the revival of the national livestock because the by-products of wheat milling will be too low to meet national stock feed requirement. Surely, we cannot import wheat offals from Zambia for our livestock farmers. The sustained growth in the local millers has an economic multiplier effect to packaging, transport, confectionary and livestock industries.
Zimbabwe is probably the only country in Africa that does not have duty tariff on wheat flour and it is also heavily reliant on foreign supplies of staple food more than other countries which are at war. Staple food is not just any other commodity but of national security concern. It is a must for every country to build and protect its own food industry.
It is uncontested that the economic situation has improved since 2008, when the importation dispensation was granted. There is no need whatsoever for the country to continue importing pre-packed salt and rice when our own packers are shut. The country continues to experience disappearance of its once popular local brands to the extent that our retail shops shelves have become a true replica of South African retail chain stores.
There is need to discourage the importation of pre-packed rice and salt and only allow bulk imports for onward packing by local millers or packers. This will also boost our packaging industry that will provide more than US$8 million per month worth of packaging. In God‘s name, we can’t have rice grown in Vietnam, packaged and branded in South Africa and then consumed in Zimbabwe. These are low hanging opportunities that can be tapped by our own SMEs and create employment and business opportunities. We need to restart such low skill value additions activities.
The milling industry has demonstrable capacity to import adequate wheat into the country (up to 300,000mt per annum) and mill it. Secondly, should our wheat and maize milling output increase, prices of flour and maize will definitely stabilise if not go down. The milling industry is not calling for a total ban of wheat flour and pre-packed salt and rice but a re-imposition of a duty on imports in order to nurture the local industry so that by the time the SADC zero duty era comes, local industry will be strong enough to competitively supply local and export markets.
The evil of these imports is that they are landing in Zimbabwe cheaper than they sell in their country of origin. For example, 50kg of bakers flour in Mozambique costs US$38 to their local bakers, but is sold for US$32 to Zimbabwean bakeries. However, if output decreases (for whatever reason) in these foreign source markets, they immediately stop exports to Zimbabwe in order to ensure that their own requirements are met. Consequently, this will immediately create a supply gap – and that’s very dangerous.
Most importantly, there is need to re-create a viable and secure market for locally-grown wheat and maize. The milling industry must be allowed to be viable enough to carry out long term contract farming arrangements with all our able farmers. This will immediately impact positively to the seed and fertiliser industries.
To achieve this, the milling industry is calling for a 20% duty on baker’s flour, 40% duty on pre-packed flour and 30% duty on pre-packed rice and salt in the 2012 budget due to be announced shortly.
Tafadzwa Musarara is the chairman of the Grain Millers Association. You can contact him on e-mail: musarara@yahoo.com
Labels: MILLERS, WHEAT
Read more...
Invest in tree planting, govt challenges sawmillers
By Kabanda Chulu in Kitwe
Wed 16 Mar. 2011, 04:00 CAT
GOVERNMENT has challenged sawmillers and timber merchants to urgently invest in tree planting to ensure sustainability of the forest industry because ZAFFICO will not meet their demand in the years to come.
Officiating at a meeting with timber producers, merchants and sawmillers on Monday aimed at finding best practices to manage the forests, Tourism, environment and natural resources minister Catherine Namugala said there was need to address challenges that inhibited the creation of linkages in the forestry business.
“We want you to develop value addition strategies because we can't continue exporting raw or semi-processed timber and yet we import products made out of our timber,” Namugala said.
She said it was important to remember that forests were a strategic natural resource and contributed a lot to Zambia.
Environment and natural resources permanent Lillian Kapulu advised the private sector to ensure optimum utilisation of trees through value addition and less operational wastage.
“We want to see those huge piles of sawdust being turned into finished products like briquettes to be used as alternative energy to charcoal,” said Kapulu.
“And why is Zesco importing transmission poles? Does it mean timber producers and merchants are failing to meet demand? Government wants you to export finished products, thereby avoiding creation of jobs in other countries.”
At the same meeting, Minister of Lands Gladys Lundwe assured that government was ready to expedite the provision of land to prospective investors in the forestry sector since planting of trees was important in national economic development.
ZAFFICO managing director Frightone Sichone said having one supplier in timber business was not sustainable.
“The private sector should come on board and supplement ZAFFICO. It is true that trees take years to mature so people fear they won't get immediate benefits but these are the same people building mansions and yet they are in their 60s,” said Sichone.
Earlier, Association for Saw Millers president Peter Kabamba accused ZAFFICO of squeezing entrepreneurs by reducing their annual wood allocation.
“Reduction of annual wood allocation is affecting saw millers' businesses since we fail to meet demands of our customers,” he said.
Labels: CATHERINE NAMUGALA, FRIGHTONE SICHONE, MILLERS, TIMBER
Read more...
ZNFU reveals interference from millers on wheat import ban
By Moses Kuwema
Tue 27 July 2010, 04:01 CAT
From left to right, Zambia National Farmers Union (ZNFU) security unit chairman Charles Coxe, deputy commissioner of police Emmanuel Chileshe and ZNFU president Jervis Zimba listening to CMR farms of Kabwe managing director Sara Ashworth during the visit to her farm on Wednesday. - Picture by Moses Kuwema ZAMBIA National Farmers Union (ZNFU) president Jervis Zimba has disclosed that there are people who are fighting to have the ban on wheat imports lifted. And Chimsoro Farms proprietor Constain Chilala has said only non Zambians can push for the reversal of the Statutory Instrument on wheat imports.
Speaking when he addressed farmers in Mkushi last week, Zimba said the country did not need any imports on wheat because the crop yield had not reduced. He said once the imports on wheat were allowed, Zambian farmers should forget about selling their wheat.
“This battle was fought, we said there is no need for wheat imports but again we are aware that the millers are working together with some directors at the Ministry of Agriculture to try and remove this SI. They started last year again now we are seeing this is what is happening…and because of the annoyance among the millers and some directors at the Ministry of Agriculture they are using a fake association just to be attacking ZNFU to say this is not right… its not correct we have to look at the bigger picture of farmers and what is happening,” he said.
He said Zambia was the only country in the southern Africa region, or perhaps in Africa, which could feed itself in any commodity but that there were people who were bent on destroying that potential.
“Some two weeks ago, one miller wrote to the minister to say you ban all exports of soya beans… now we have a bit of excess in terms of soya beans but what they want is to make sure the prices are suppressed and they pay the yields to the farmers for nothing...We have told them there is no need of writing letters to the minister, write your letters to the president of ZNFU who will then call a stakeholders' meeting and determine how much should go for exports, we did it last year,” he said.
And Zimba said farmers should this year brace themselves for hard times because of the commodity prices which he said were not good.
“Whatever you have produced no one knows where that maize is going to go so you are hammered with commodity prices. We need to put our heads together, for the issue of commodity prices in the country we are completely at cross roads. If you look at the briefings we sent you, all of you must have seen how the prices have dropped in a couple of months be it wheat, be it soya beans,” he said.
Zimba said the Food Reserve Agency (FRA) had totally lost direction, adding that the continued lack of a board at the agency was a source of concern for the farmers.
“They FRA keep interfering on the market at the wrong time all the time, you remember in the beginning of the year we had early maize to be taken on the market, most of it was stuck, today some of you have sold it for a song. There is nowhere in the world where you have a huge output of crops and the minister is delaying or failing to announce the board when he has got the names on the table, we can’t allow a situation like that. Right now as am talking there is an advert in the paper where the FRA is saying they have about 160,000 metric tonnes and they have just put a huge advert that traders should bid for it to try and see if they can buy it for exports…they have got no capacity as FRA to monitor whether that maize is going for exports or not. For heaven’s sake why can’t FRA themselves not secure the export market?” he wondered. “They have been telling us that they have secured almost a million tonnes of exports, then why advertise locally to allow other people to export it when FRA themselves have got the capacity to sell it, so as farmers we are braced for hard times this year its not going to be a good road in terms of the maize and we know the cost of production is high, how do farmers sell their commodity below the cost of production?”
Zimba said if the situation was allowed, the millers and traders would again start playing around with the prices of the commodity.
Zimba said the farmers were grateful to the government for finding money to buy maize but that it was unfortunate that the funds had not yet been released.
“We are now coming towards the end of July and you know when you are buying commodity under collateral management it takes long time meaning that they have got to buy and then after two to three weeks the banks have got to verify how much maize, is it true, the location, so for a farmer to get his money, we will be looking at may be another three weeks and who knows with the way the FRA plays games it may be a month, so these millers would say we have no choice but to keep buying and dispatching 42,000 and so forth. So we have a very serious problem at hand regarding the maize marketing season this year and I call it the national crisis,” he said.
Zimba said there was need for a serious intervention by the government because officials in the Ministry of Agriculture were reluctant to implement the presidential directive on exports.
“Again I met the president before the end of the year I said look, can we try and look at the exports to Democratic Republic of Congo DRC, the DRC problem we have is that we keep shutting the door, open it up, shut it...so the best thing we can do is can we have these quotas, agreed quotas between the DRC and in February the millers, ZNFU, grain traders we established a list of these quotas we should be able to be given to DRC agreed and they were given to them, to date as I am telling you ministry of agriculture has said no we cannot do that we shall give it to the joint permanent commission I think this is between the Copperbelt Province and the DRC, what a joke!
“We believe the Ministry of Agriculture is totally in reverse gear its like nobody seems to know whether we are going forward or backwards, the only time we see these Ministry of Agriculture officials very active is already now they know that they have got a serious crisis of the maize, they are already jumping talking about the Fertiliser Support Programme FSP programme that this year we are giving 900,000 farmers, they are more excited because this is where they cut deals. No one is interested about the FSP now what every farmer is interested in now is how he is going to secure his maize.”
And Chilala said the implementation of the SI was to protect the production of wheat in the country.
“The production of wheat is so high now to a level where we are able to feed even Katanga Province in the DRC, now if someone at the ministry decides to go against the presidential directive or advise against the presidential directive, that person is not Zambian he should be one of those who were involved in the importation of wheat which we heard in 2008 and 2009 where they brought 30,000 metric tonnes during our harvesting season,” Chilala said.
He said millers had become like briefcase business men because they did not want to buy the crop on time.
“They want us to keep the crop after growing it and then they want it for nothing. And unless this is resolved between the millers and the farmers it will see farmers now stop investing in wheat, they will start saying no investment in wheat is very expensive it requires you to buy centre pivots, irrigation equipment and those are very expensive,” he said.
And Chilala said a crop surplus without well organised marketing programmes put people into new and bigger problems.
“As a country we are able to produce these crops by the farmers, but farmers are now suffering that they can't get this crop to the market to process it so that the Zambians can eat it, one time I read in the newspaper where the Minister of Agriculture was saying we have got a bumper harvest now, so the food can go down but he forgot that that food costs money to produce, how does he expect that food to walk into homes as cheap as he was anticipating it to because someone spent money to grow the food he must sell it at a reasonable price for him to be able to grow a new crop this year,” said Chilala.
Labels: CHARLES COXE, COSTAIN CHILALA, JERVIS ZIMBA, MAIZE, MILLERS, ZNFU
Read more...
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
Read more...
ZNFU threatens to expose Lusaka millers cheating Mazabuka farmers
Written by Henry Chibulu in Mazabuka
Wednesday, April 22, 2009 6:07:56 PM
THE Zambia National Farmers Union (ZNFU) in Mazabuka has threatened to expose some Lusaka millers who have invaded most parts of Mazabuka and allegedly cheating farmers by buying maize at low prices.
ZNFU agri-business manager for Mazabuka, Clement Phiri, yesterday said investigations conducted by his organisation had established that some millers believed to be from Lusaka had allegedly hired agents to buy maize from farmers for as low as K18,000 per 50 kilogramme bag in chief Mwanachingwala’s area and at K 25,000 and K 35,000 in Chivuna and Chikankata respectively.
Phiri said there was need for the government to move in swiftly and announce the floor price for maize and ensure that the Food Reserve Agency (FRA) was allocated huge resources to buy off the commodity from small- scale farmers.
He said the government should buy enough maize from farmers for national reserve and prepare for any food shortages.
Phiri said ZNFU was worried with the increased number of unscrupulous maize traders buying maize at give-away prices, adding that the private sector could create an artificial maize shortage that may result in price hikes for mealie- meal.
In the 2007/2008 maize marketing season, a 50 kilogramme bag of maize was pegged at K50,000 as announced by the government.
Phiri has since urged agriculture minister Brian Chituwo to ensure that the floor price of maize was announced in the first week of May to save farmers from being swindled.
On Monday, Mazabuka district commissioner, Tyson Hamaamba, pleaded with farmers to stop selling maize to briefcase buyers and wait for the government to announce the floor price.
Labels: CORRUPTION, MAZABUKA DISTRICT, MEALIE-MEAL, MILLERS, ZNFU
Read more...
Govt subsidy to millers not sustainable – Weber
Written by Fridah Zinyama and Chibulu in Mazabuka
Monday, February 16, 2009 5:16:17 AM
GOVERNMENT’S decision to subsidise the millers through the supply of cheaper maize is not sustainable for Zambia, Agricultural Consultative Forum (ACF) Food Security advisor professor Michael Weber has observed.
And chairperson for the Parliamentary Committee on Agriculture Request Muntanga has called on government to subsidise production of maize in the country as a long-term measure to resolving mealie-meal shortages as opposed to subsidising consumption.
Commenting on the decision by government, through the Food Reserve Agency (FRA) to purchase maize from millers and resale it at subsidised prices, Prof Weber in an interview, said there was need for more transparency in the maize crop marketing system if the current mealie-meal shortages were to be permanently eliminated.
Prof Weber said there was tightness in the maize marketing system last year which had led to the current problems being experienced in the country.
“Some of the millers have not been open about the stock of maize which they have in their warehouses and I think this is what has led to the current expensive mealie-meal on the market,” he said. “This has prompted government through the Food Reserve Agency (FRA) to subsidise the millers, a scenario which is not sustainable.”
Prof Weber said government’s decision to subsidise the millers was very costly and could not be relied upon to sort out the problems in the maize sector.
“We understand that government has to be concerned about whether there is enough food in the country but this has to be done in a sustainable manner,” said Weber.
And Muntanga said government’s decision to buy maize from millers at a subsidised price would create future problems as millers were always going to expect government to bail them out.
“The only solution to the mealie-meal shortages in the country is for government to ensure that it comes up with proper measures of subsiding production,” he said. “Small-scale farmers should have access to inputs and this will subsequently lead to enough food production and low maize prices in the country.”
Muntanga expressed concern at the rate in which the mealie meal sector was being handled in the country.
“If things continue being run like this, government will be held at ransom, where millers will continue hoarding maize expecting government to subsidise them,” Muntanga said.
Meanwhile, some mealie-meal traders in Mazabuka have inflated prices of the commodity which is now fetching at between K 60,000 and K75,000 at Nakambala market.
A survey conducted at Nakambala, which is Mazabuka’s largest market revealed that a 25 kilogramme bag of National Milling breakfast had been hiked from K45,000 to K70,000 while that of roller meal was being sold at K60,000, from K36,000.
Leading supermarkets had by yesterday completely run out of the commodity, forcing traders on the black markets to inflate prices by almost double the original price.
Traders talked to said the price of the staple food could not be reduced because Zambia, as a free market economy, promotes competition in business.
They also said the price of mealie-meal at the market was cheaper than some named shops in the central business district which were now pegging the price of the commodity at around K75,000 per 25 kilogramme bag.
Labels: FARM SUBSIDIES, FRA, MAIZE, MEALIE-MEAL, MILLERS, REQUEST MUNTANGA
Read more...
‘Zambia has unexploited potential in food sector’
Written by Florence Bupe
Monday, January 12, 2009 6:45:17 AM
BAKHRESA Food Products Limited operations manager Soumendou Barnejee yesterday said Zambia has massive unexploited potential for investment in the food sector. And Barnejee has urged business houses to embrace policies that will cushion their investments against external economic shocks and currency fluctuations. In an interview, Barnejee said Zambia’s conducive investment atmosphere should be exploited to promote production and distribution.
“Zambia still has some of the friendliest investor policies in the region, and that’s why we chose this country as one of our investment destinations. We have seen that Zambia has the potential for market growth, and the buying capacity of consumers is likely to increase over the next few years,” he said.
Bakhresa Food Products Limited is a subsidiary of Bakhresa Tanzania, established over 30 years ago.
The Zambian subsidiary distributes ice cream, but Barnejee disclosed intentions to set up a milling business as soon as negotiations with the Zambian government are concluded.
“We are engaged in grain milling in Uganda, Tanzania and Malawi. In Zambia, we are currently concentrating on ice cream, nectar drink and mineral water production, but we do have intentions of diversifying further,” he said.
Barnejee also said the company was exploring prospects of covering other provinces of the country apart from Lusaka.
The Zambian subsidiary is a US $500, 000 investment, but Banergee said the company would eventually grow its capital base.
He said his company was well placed to compete on the market, and pointed out that positive competition was vital for the enhancement of the food industry.
“We do face a lot of competition from local manufacturers, but we see competition from a positive angle, and we intend to use this competition to increase our market base,” he said.
And Barnejee has advised business houses in Zambia to put in place measures to mitigate currency fluctuations.
He said it was unrealistic for businesses to expect financial market trends to be stagnant, adding that currency movements should be anticipated either upwards or downwards.
“I believe as a business, you need to be ready for currency fluctuations. These are norms that will always be there, you don’t expect that the foreign exchange market will record the same trends for years,” he said.
Barnejee expressed optimism that consumers’ purchasing capacity would increase once the impact of the global economic recession eased.
Labels: BAKHRESA GROUP, GREAT DEPRESSION II, MILLERS, SOUMENDOU BARNEJEE
Read more...
FRA, millers in talks over maize purchase
Written by Chiwoyu Sinyangwe
Friday, January 09, 2009 5:29:42 AM
FOOD Reserve Agency (FRA) has started negotiations to purchase
maize from some millers for reallocation in an effort to stabilise mealie-meal prices in Zambia, executive director Dr Anthony Mwanaumo has disclosed.
In an interview, Dr Mwanaumo said the millers who were currently negotiating with FRA were mainly from the Copperbelt as they had excess maize stocks.
Dr Mwanaumo could not however give any details of the transaction, saying the process was currently at negotiation stage.
He said FRA would issue a comprehensive statement once the deal was completed.
“We are in discussion with those millers who have excess maize so that we can see how best we can stabilise the prices of mealie meal throughout the country by offloading onto the market subsidized maize,” he said.
And Dr Mwanaumo disclosed that FRA was still working on the total cost implication of the decision to offer maize to milling companies at a subsidised rate.
“As you know we reduced the price of maize, so the price differential is inbuilt in the same support we receive from the government because we are a grant-aided institution,” said Dr Mwanaumo. “So, by reducing the price of maize, we are still working on the cost implications of that and we shall submit to the government.”
Antelope Milling managing director Eleftherios Kaldis disclosed on Tuesday that his company had struck a verbal agreement in which FRA would buy off the maize stocks from them and re-allocate it at a cheaper price.
Last month, FRA announced a reduction in the price of maize from K63,000 to K55, 000 per 50 kilogramme bag, an initiative aimed at cushioning the price of mealie meal which had skyrocketed to an all time high of around K70,000 in some parts of the country.
Labels: ANTHONY MWANAUMO, FRA, MAIZE, MILLERS
Read more...
Swap Spinning declares 1,500 workers redundant
Written by Abigail Chaponda in Ndola and Mwila Chansa in Kitwe
Thursday, January 01, 2009 7:56:59 AM
ZAMBIA Congress of Trade Union (ZCTU) Ndola district chairman Crispin Mikabo has disclosed that 1,500 workers at Swap Spinning Mills have been declared redundant.
And ZCTU Luanshya district vice-chairperson Alfred Chaminuka has said it is unjustifiable for ZAMEFA to also start laying off workers.
Mikabo, in an interview, advised President Rupiah Banda, who is expected to return from his 10-day holiday in Mfuwe today, to resolve job losses in companies.
He said the government should wake up and resolve the job losses as they were getting out of hand.
“The workers have not even been paid their November salaries and [Swap Spinning Mills] management has told them that they can only be given their money when the company is sold together with all the assets .
The job losses issue is getting out of hand and the President should personally come in. This has now become a trend where everyday workers are declared redundant,” he said. “Out of the 1,500 workers, 900 are causal workers and 600 are permanent workers.”
He said the government should come up with measures to ensure that workers who were declared redundant by their companies were given their salaries before they were given their benefits.
Mikabo also said the government should seriously talk to investors to serve their workers with notice before they were declared redundant.
And a visit at Swap Spinning Mills plant in Ndola revealed that no activities were taking place while the company’s human resources manager refused to comment and referred all queries to Christopher Mulenga of Grand Thornton who demanded for a press query.
Meanwhile, Chaminuka said reports reaching him were that ZAMEFA had so far laid off between 18 and 20 people and that the numbers were likely to increase.
“Now, what is this?” Chaminuka asked. “When these people were advised to be buying Copper from the London Copper Market, they complained that it was expensive and when the copper was expensive, they were still in production, now that the price of copper has fallen, why do they want to start laying off workers?
This is when they are supposed to make profits.” Chaminuka said he did not see sense in ZAMEFA laying off workers because they were supposed to be rejoicing that the copper prices had fallen.
He accused ZAMEFA of breaching the contracts of the people it had allegedly laid off and that they had not even been paid their benefits in full.
Chaminuka said most companies were now taking advantage of the global economic crisis by laying off workers, saying this was not right.
“Luanshya has already been hit through job losses in the mines so we feel ZAMEFA should be able to sustain a few employees,” said Chaminuka.
Efforts to get a comment from ZAMEFA authorities failed by press time.
Labels: JOBLOSSES, MANUFACTURING, MILLERS
Read more...
Imported maize to roll in
December 31, 2008
The Food Reserve Agency (FRA) says the imported 110 metric tonnes of maize will start arriving in Zambia next month. Executive Director Anthony Mwanaumo says the agency is this week expected to complete the signing of three contracts to facilitate the importation.
Dr. Mwanaumo said one contract has already been signed while the other remaining two will be signed by the end of this week. He was speaking in an interview with ZNBC news in Lusaka, Wednesday.
And Dr. Mwanaumo has appealed to millers that have accessed from the agency to pass on the benefits to consumers by reducing mealie-meal prices.
He said millers who have not yet reduced mealie-meal prices should emulate their contemporaries who have reduced the prices of the commodity to acceptable levels.
And National Milling Corporation says it will soon reduce mealie meal prices in line with the reduction in maize prices by the Food Reserve Agency (FRA).
Managing Director Peter Cottan said his company submitted a letter recommending a reduction in mealie meal prices to the minister of Agriculture, Wednesday.
Mr. Cottan explained that national milling delayed in reducing the price of mealie meal because the old contract it had with the Food Reserve Agency has expired.
He also told ZNBC that his company will start buying subsidized maize from FRA starting Wednesday.
Mr. Cottan said national milling will announce a reduction in mealie meal prices after getting a feed back from government.
The Food Reserve Agency last week announced a reduction in maize prices from 63 thousand Kwacha to 55 thousand Kwacha for a fifty kilogramme bag.
Chimanga Changa Milling Company became the first Company last week to reduce price of its Mealie Meal following the reduction in the cost of Maize from FRA.
[ZNBC]
Labels: MAIZE, MILLERS, PETER COTTAN, PRICING
Read more...
More millers consider mealie meal price cuts
By YANDE KAPEYA
SOME millers have started considering a reduction in the price of mealie meal following the reduction in the price of maize grain by the Food Reserve Agency (FRA). On Wednesday, the FRA reduced the price of maize from K63, 000 to K55, 000 per 50 kilogramme bag.
In Kapiri Mposhi, Chimsoro Milling Company proprietor, Constain Chilala said the company would consider reducing the price of the commodity to K45, 000 for a 25-kilogramme bag of breakfast and K35, 000 for roller meal.
Mr Chilala said in an interview yesterday in Lusaka that the move by the FRA to reduce the price of the maize grain was good news for millers as it would reduce the cost of producing mealie meal.
“The cost of maize was quite high and most millers found it difficult to reduce the price of mealie meal. As you know, the price of the commodity is determined by the price of the maize grain.
‘Now that Government has reduced the price of the maize grain, it will give an opportunity to many millers to acquire the commodity at a cheaper price,” he said.
Mr Chilala said all millers in the country should consider reducing the price of mealie meal now that they would be able to access the grain cheaply.
“Even if some millers decided to keep the price of mealie meal high, they will lose out as consumers will be going for cheaply priced mealie meal. It’s only right that as millers, we reduce the price of the commodity to a reasonable price,” he said.
In Luanshya , Roan Antelope Milling said the company would consider reducing the price of the commodity after it holds a meeting with the FRA next week.
“Yes, we shall definitely consider reducing the price of the commodity after we hold a meeting with the Food Reserve Agency on Monday next week,” a company spokesperson said.
And a Chat Milling spokesperson said in a separate interview that the company would reduce the price of mealie meal following the reduction in the price of maize grain.
The spokesperson said it would be inconsiderate if millers countrywide did not reduce the price of the commodity.
“In the interest of the nation, millers should reduce the price of mealie meal following the lowering of the price of maize by the FRA. As Chat Milling, we will definitely consider that when we receive the new maize consignment,” he said.
On Monday, Chimanga Changa Milling Company Limited announced a reduction in the price of mealie meal from K55, 000 to K45, 000 for a 25-kilogramme bag of breakfast.
The milling company also reduced the price of a 25-kilogramme bag of roller meal from K45, 000 to K35, 000.
And on Tuesday, Kwacha Milling Company in Chipata also announced price reductions on mealie meal from K49, 000 to K46, 000 for a 25 kilogramme bag of breakfast while the same quantity for roller meal was pegged at K40, 000 from K43, 000.
Labels: COSTAIN CHILALA, FRA, MEALIE-MEAL, MILLERS
Read more...
Mealie-meal shortage looms in Mazabuka
December 29, 2008
A shortage of mealie-meal is looming in Mazabuka following the shortage of the commodity at Choma Milling depot and some leading super markets in the district. The situation is similar at Mazabuka’s largest market ,Nakambala, where retailers do not have the commodity in stock.
A survey conducted by ZANIS in Mazabuka today revealed that Choma Milling Company, Mazabuka depot, ran out of the commodity four days ago. Milling Depot Manager, Goodson Daka, told ZANIS that his depot ran out of the commodity four days ago because of a shortage of maize in the district.
Mr. Daka, who could not state when the situation would normalize, said only the company top management could answer such queries.
And Bhagoos Group of Companies Director, Suleman Bhagoos, disclosed that his super market has been without mealie-meal for over six days. He urged the millers to quickly address the situation before it degenerates into a crisis.
At Shoprite staff talked to by ZANIS said only a few bags of National Milling brand are in stock. The staff said the quantities in stock will only last for about three days.
But Kapinga Milling Company Manger Grant Mwankontami said his company will offload mealie-meal at its depot tomorrow. Mr. Mwankontami however said his company will only sell a bag to each client. He said the move is aimed at striving to serve as many clients as possible.
ENDS/HC/AM/ZANIS
Labels: HUNGER, INFLATION, MAZABUKA DISTRICT, MEALIE-MEAL, MILLERS
Read more...
2008 has been a disaster – Sata
Written by Masuzyo Chakwe
Saturday, December 27, 2008 1:33:15 PM
PATRIOTIC Front (PF) president Michael Sata yesterday said the year 2008 has been a disaster and Zambians survived by the will of God.In an interview, Sata hoped there would be change next year in the way the country was being run. "Maybe when they stop being on holiday and start working will we see some change," Sata said.
And commenting on the decision by the Food Reserve Agency (FRA) to reduce the price of maize from K63,000 to K55,000, Sata said the price of mealie-meal should be within the reach of the people.
He said the government should not play with people by reverting to the original price of maize and say they had reduced it and expect the millers to implement a reduction in food prices.
"The government before elections increased the floor price of maize to hoodwink the farmers so that they vote for the MMD. Then they saw that this had not worked. Then they think by reducing the price of maize, millers are going to play ball and reduce the price of mealie-meal," he said.
Sata said the reduction of mealie-meal prices by K10,000 by some millers would have very little impact. He said the government had a lot of work to do, to remove excess value added tax as the importation of maize would be more expensive than reducing the price of maize.
"Why is FRA not buying the thousands of metric tonnes of maize which is there in the country. Why are they only interested in importing. A lot more needs to be done other than changing the price of maize when there is no maize in the country," he said.
Sata said the government must do a lot more to remove the unnecessary expenditures.
He said Zambia was having problems because of spending money on unnecessary things like the National Constitutional Conference.
On Wednesday, FRA reduced the price of maize and said a 50 kilogramme bag of maize would now cost K55,000 from the previous K63,000.
FRA board chairperson Costain Chilala said the decision was made in consultation with the government to further bring down the price of mealie-meal.
He said all willing millers would be supplied FRA maize at 100 per cent mill requirements.
And agriculture and cooperatives minister Dr Brain Chituwo on Thursday said the government expected the millers to respond to the FRA decision to reduce the prices of maize to benefit consumers.
Labels: BRIAN CHITUWO, FRA, INFLATION, MEALIE-MEAL, MILLERS, SATA
Read more...
FRA releases 150 tonnes of maize to Mazabuka miller
Written by Henry Chibulu in Mazabuka
Monday, December 22, 2008 8:43:20 AM
THE Food Reserve Agency (FRA) has released 150 metric tonnes of white maize to Kapinga Milling Company of Mazabuka following the government’s directive that the commodity be offloaded to millers.
Kapinga Milling Company manager Grant Mwankontami confirmed the development in Mazabuka yesterday.
The government, through the Ministry of Agriculture and Co-operatives, recently directed the FRA to offload maize to millers in an effort to help reduce the price of mealie-meal on the market.
Mwankontami said the release of the maize, although not sufficient, would help the company in producing enough mealie meal to satisfy the growing demand of the commodity among its clients in Mazabuka, Kafue and Lusaka.
He said the monthly allocation of 150 metric tonnes from FRA, in addition to the maize the company bought from farmers in the last maize marketing period, would guarantee a steady supply of mealie-meal until April next year.
Mwankontami also said Kapinga Milling would maintain the current price of mealie-meal until after the harvest period.
He said currently, a 25 kilogramme bag of breakfast is fetching at around K52,500 while roller meal is selling at K 46,500 for the same quantity.
The FRA is expected to offload 20,000 metric tonnes of maize onto the market on a monthly basis at K60,000 per 50 kilogramme bag. The FRA and the government are also concluding plans to import 100,000 metric tonnes of white non-GMO maize from within the region to cushion the impact of the commodity’s shortage on local consumers.
Labels: FRA, MAIZE, MILLERS
Read more...
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
Read more...
Millers are hoarding Maize - Govt
November 12, 2008
Government has unearthed a scam in which some milling companies are allegedly hoarding maize for speculative and profiteering motives. It has also been established that the country has enough maize stocks to last until March next year. This is according to a statement jointly issued by the Minister of Commerce and Agriculture on Tuesday.
The Ministers are concerned that the motive for hoarding the maize stocks also seems to be centred on embarassing the government in the eyes of the public.
Government has directed milling companies to ensure that traders do not inflate mealie-meal prices.
It has been proposed that roller meal should be sold between K40,000 and K43,000 while break fast should be pegged at about K50,000 and K52,000 per 25 Kilogram bag.
The statement indicates that the millers are agreeable to the proposed price levels for mealie-meal.
The ministers said the situation will continue to be monitored with a view to take necessary corrective measures.
Traders across the country have continued to hike prices of Mealie Meal in the last few weeks.
[ZNBC]
Categories: Other News
Labels: INFLATION, MAIZE, MILLERS
Read more...
