Mealie meal prices may still not reduce if the cost of maize from the private sector remains high, says the Millers Association of Zambia (MAZ).
But the Association has welcomed government’s move to lift the ban on mealie meal exports and have expressed willingness to work on ensuring the initiative is well-regulated to help the country tackle rampant smuggling of the commodity.
On Sunday, Agriculture Minister Michael Katambo announced the lifting on the ban of mealie meal exports following consultations with key stakeholders on the maize availability situation in the country.
Katambo said that the move equally reflected that government was convinced Zambia was food secure and that mealie meal prices would remain fairly stable.
And asked if the new policy pronouncement, coupled with the reduction in fuel prices last week, would eventually lead to lowering mealie meal prices, MAZ president Andrew Chintala explained that prices of the commodity may still not reduce if the cost of maize from the private sector remains high.
The national average prices of the staple commodity have been stable, but have steadily increased to a one-year high, with a 25Kg breakfast bag now costing an average K93.36 per 25Kg breakfast bag by last month from K69.72 for the same quantity one year prior, according to Central Statistical Office (CSO) data.
“Obviously, we are trying, as millers, to cushion that impact on the consumer. And we hope that if we can maximize the exports, we will be able to stabilize the local prices so that our consumers can pay affordable prices for the produce; we will monitor the trading activity and ensure that we keep checking and strike a balance where possible. For now, I can only say that if maize prices will remain where they are, we can predict stable prices going forward,” Chintala told News Diggers! in an interview.
“But if there will be a movement in terms of maize pricing, it’s a chain reaction. But for now, we can predict stable prices going forward.”
When asked if the enhanced accessibility of maize from grain traders, in addition to subsidized Food Reserve Agency (FRA) maize, would impact on mealie meal prices, he pointed out that maize prices from the private sector remained costly.
“Yes, that is the case. But it’s a very delicate and interesting transaction. You can’t shy away from the fact that the price that is being offered in terms of the maize that is being offloaded from the private sector is on a higher price as compared to the maize from FRA. We are saying, there has to be some kind of leverage whereby you take the local market as a priority and then the export market is just secondary,” he explained.
“There was a concern and we had to facilitate for maize to be released to millers on the Copperbelt, but a situation has moved in, even to Lusaka, some of the millers are having difficulties; this will improve the supply of the commodity, but you can’t run away from the fact that there’s also a price implication.”
But Chintala, who is also Mpongwe Milling corporate affairs manager, hailed government’s lifting of the ban on mealie meal exports as a progressive measure that would help millers capitalize on the export market, especially the DRC.
“In terms of the appetite to be able to participate, I must say all the millers will be well positioned to able to participate in the export market. But what would vary is the margins in terms of what you are able to buy and export. We (Mpongwe Milling) have the muscle, but there are others who would not be able to be able to do it at a larger scale,” said Chintala.
“We will definitely take advantage of this. The market there and is the appetite is so huge across (the Kasumbalesa Border) and we just need to scale-up. So, we are quite keen and more than ready to work with government and ensure that the export is managed properly to ensure that trade is encouraged in a rightful manner; there’s been rampant exports of the commodity illegally. Now that this announcement has come, it’s going to curb the illegal trade of the commodity.”