Zambia can maintain reduced mealie-meal prices – MAZ

Millers Association of Zambia (MAZ) Chairperson Andrew Chintala says the current price of mealie-meal can be sustained if the country manages its exports of the commodity well.

And Chitala says governments’ decision to scrap off the 10 per cent levy on all maize exports to the Democratic republic of Congo (DRC) will greatly affect Zambian millers.

Chitala said this when he featured on ZNBC’s Kwacha Good Morning Zambia programme where he was discussing the state of the economy and the improvement in the performance of the local currency.

“What triggered the increase in terms of mealie meal price and by-products of maize in the last five month was the shortage of raw materials in the market and I think you may need to appreciate the fact that we entered into a tripartite agreement between the Millers Association of Zambia (MAZ), Grain Traders Association of (GTA) and the government being represented by the Food Reserve Agency (FRA). The effort was aimed at cushioning the impact on the consumers’ side. We should anticipate a further reduction but it all depends on what the farmers will be asking for. You need to appreciate that in two, three months ago, millers were buying maize at k2, 850 per metric tonne, we are now buying at k1, 500. So it’s just prudent I think,” Chintala said.

“You know previously we have seen people say that millers are greedy people, no! And I think we must commend them because immediately the millers reduced the price of maize on the market, we passed on the benefit to the consumers, therefore I think, I expect people to commend the millers other than asking them to say why have you reduced the mealie-meal prices now? You see, you need to look at the trend. The consumption pattern for any commodity varies and changes from time to time, we are now in a period where there is no demand of the finished product which is mealie-meal now, the demand for mealie-meal consumption has actually reduced hence, most of the millers are now operating at 50 % in terms of meal utilisation and because of that, there isn’t that much demand for the finished product and we are hoping that the farmers will offload the maize that they are currently harvesting on the market at the current open market price which is k 1, 400 to k1, 500 and if that will be the price that will be obtaining in the next two to three months from now, then we expect the price of mealie-meal to be stable.”

Chintala projected that the current price of mealie meal could be sustained if the country managed it’s exports well.

“Our annual consumption is 1.8 million metric tonnes of maize, that is what we need as a country now, when you talk of 3.8 million it means there is 2 million surplus crop on the market. So as long as we continue to manage and monitor what is going on in the country and what we need in the country, the price that you see is sustainable. So we need to manage the marketing season, we need to manage the exports of either maize or mealie-meal, so if we can manage this properly, I think we can have full time value chain properly with the ministry responsible, that’s ministry of agriculture,” he said.

“We expect the price of mealie-meal to be sustained through to the next season as long as we continue recording what we have recorded and even above that, then the price is sustainable because you are assured of constant supply of the raw material, secondly you expect stable maize prices so really the price that you have seen is sustainable but we need to manage this properly other than the way we’ve seen because any bag that leaves the boarder must be accounted for because if you export a tonne or even two tonnes without following the laid down formalities under the Ministry of Agriculture, it will affect the whole plan that we have.”

And Chitala commended governments’ decision to start exporting maize to East Africa and hoped that the market in that region would as well demand for finished products.

“Well, it’s a welcome move and like I have said, we only need 18 metric tonnes as a country. Now, traditionally Zambia is known of exporting mealie-meal into DRC, we are hoping that since we have started exporting maize into the East African market, we hope that the market their will start demanding for finished products such as mealie-meal and we hope that the government will actually engage the millers to try and see how best we can also participate because government is saying that it’s encouraging value addition and if they are encouraging value addition, they must encourage the export of finished products but then the market really differs from region to region,” he said.

“In the Southern region for example DRC, they need more of our mealie-meal other than maize, in East Africa they need our maize because specifications for mealie-meal production are different from southern region, so we are saying first of all can we first give them our maize? And if they appreciate the quality of the maize that we produce as a country then eventually they will be convinced to ask for the mealie-meal. So this is a good start and we hope that the traders that are currently participating in the current arrangement of the export of maize will actually try and find a market for the finished product that is mealie-meal and stock feed.”

Meanwhile, Chitala appealed to farmers to demand a good price for their maize and consider supplying the produce to the locals before they could export it the external market.

“There have been reports in some sections of the media that there are people who are buying maize from the farmers for as low as k35 and k40. We are saying, look millers are offering a good price here. Before even FRA enters the market, we need to appreciate that millers are the major off-takers of the maize that the farmers produce and all we are saying is can we work together to satify the local demand? And I would like to put this record correct, people are saying FRA is going to announce the flow price, its not the flow price, FRA will just announce how much they buying maize for. Farmers are therefore challenged to sell to either FRA or to the millers or even traders. I think currently we are offering the best price that farmers really should take advantage of instead of selling to those that want to export so my appeal is please can we first of all satisfy the local demand before we think of exporting anything?” he asked.

And Chitala said the decision by government to scrap off the 10 per cent levy on all maize exports the Democratic republic of Congo (DRC) would affect the millers.

“It will affect us a lot because we had lost market in terms of mealie meal supply in the Democratic Republic of Congo. We lost that market to South African products which is mealie meal that has been getting into DRC. And what we are trying to actually do as millers in Zambia is that we are trying to reclaim the market that we lost to our competitors in South Africa who are busy pumping mealie meal in DRC. So it will affect us because if we export mealie meal in DRC now, it will make our mealie meal uncompetitive in terms of the pricing of the finished product, but when you look at other regions like East Africa, we welcome the move we would like traders to actually explore that market. Let them export into that market other than exporting into the DRC because it will affect us a great deal if we allow exports of maize into DRC because it will be very difficult for us to reclaim the market share that we have lost,” said Chintala.

         

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