Millers Association of Zambia (MAZ) chairman Andrew Chintala says millers have already effected a mealie-meal price reduction, adding that any extra cost above the approved K85 per 25Kg breakfast bag is effected by retailers.

And Chintala says all millers who have signed contracts with the Food Reserve Agency (FRA) already know the consequences of abrogating the agreement.

He was reacting to an FRA statement issued by executive director Chola Kafwabulula that millers who accessed subsidized maize from the Agency but found selling mealie meal at exorbitant prices would be penalized.

“The millers are very much aware with the risks that have to do with going against what has been agreed to in the contract. So, it’s practically impossible that a miller would take such a risk by not passing on the reduction in terms of mealie-meal prices. So, all the selected millers that were participating on the FRA programme have effected the price reduction; anything outside the milling plant like a K3 or K5 more, that depends on the area where you are selling from because that also attracts the transport cost. So, millers have really responded and have reduced the mealie-meal prices, according to what they have subscribed for in the contracts,” Chintala said in an interview.

“So, the call by ED (executive director) is a welcome call because I think he is actually reminding the millers on what they actually know and they have signed to. And if that happens where a miller abrogates a contract they have agreed to, then they have themselves to blame.”

He explained that the extra cost above the signed for K85 per 25 kilogramme bag of mealie-meal was being effected by retailers to cover for transportation costs from milling plants to the point of sale.

“The selected millers that have been buying maize from FRA have signed contracts. They haven’t just been buying. They have contracts, which are binding. And in these same contracts, which they have signed, there are certain conditions like (i) there is a prescribed price that you need to sell your mealie-meal at. So, if you buy your maize, let’s say at K2,200 [per tonne] the miller is expected to sell at K85 per 25 kilogramme bag of breakfast and K70 bag for roller meal. These are prices that you will buy from the milling plant. It does not include the transport cost that a trader or the agent will incur when moving the bag from the milling plant to sale point,” he explained.

And Chintala, who is also Mpongwe Milling corporate affairs manager, said all the millers that had signed binding contracts with the FRA were aware of the consequences of breaching it.

“His call to the millers is line with what the millers have signed to because those millers that have signed the contracts are aware that if they abrogate what has been agreed in the contract, they risk having been banned for two consecutive years without participating in terms of maize purchasing at FRA. Secondly, the contract will be terminated forthwith even before they finish picking their maize if at all they have paid for it. So, you lose even the money you have paid for,” said Chintala.

The national average mealie meal price jumped to one-year record high of K104.74 per 25Kg breakfast bag last month compared to K77.34 for the same quantity one year prior, according to Central Statistical Office (CSO) data.