Millers Association of Zambia (MAZ) chairman Andrew Chintala says high mealie meal prices currently obtaining on the market are mainly because millers are accessing maize at much higher costs.
But Chintala says he is optimistic that an increased supply of maize on the market may eventually lead to a reduction in mealie meal prices.
The price of a 25kg breakfast bag of mealie meal has in the past fortnight been trading as high as K125 in some parts of Lusaka, when price of the same quantity was around K70 during the same period last year.
In an interview, Chintala said millers were currently buying maize between K2,800 and K3,000 per metric tonne, compared to K2,200 per metric tonne in the first quarter of this year.
“What I have noticed is that mealie-meal prices have remained relatively stable over the last two months. I haven’t seen any sharp movements in terms of upward adjustments of mealie-meal. I think to respond, what has happened is that the maize prices have been relatively high compared to last year this time around in the season,” Chintala said.
“So, the current prices obtaining on the market in Lusaka is between K2,800 and K3,000 per metric tonne. If you look at the start of the season, the first quarter of 2019, we were buying maize at K2,200, even from the Food Reserve Agency (FRA), and that translates into K110 a bag. So, now, the maize prices have gone to K3,000 per metric tonne, which is K150 per 50Kg bag [of maize]. So, if you have seen some price increase in terms of mealie meal and other by-products, it’s because of the maize prices obtaining on the market and nothing really major, but the price of maize that has caused that.”
But when asked whether mealie meal prices were expected to increase even more, Chintala explained that an increase in the supply of maize could eventually induce a reduction in mealie meal prices.
“You know, maize is a very sensitive commodity that we have to deal with in Zambia because maize deals not only with it being the staple food, but it also borders on national food security. So, you have seen that whenever we are talking of food security, we actually concentrate and refer to maize so in as far as the trade practices or marketing practices of maize, it’s very difficult for me to actually give a price that is constant or maybe to give you prices of maize for the next three months,” Chintala explained.
“So, sometimes when demand is too much, the prices seem to go up, when the demand is low, then the prices also start going down. So, currently, what we noticed is that the demand was very high. Remember that we were complaining at the start of the year that millers were having difficulties in buying maize, so what had happened was that, the demand was so huge so those that had maize had taken advantage of the short supply of maize and the prices went up. So, now that farmers have started offloading maize following the FRAs announcement, we have seen that supply of maize on the market has improved by 50 to 60 per cent. But we hope to see a further increase in terms of maize supply; that will mean, obviously, the supply will meet demand, hence reducing the price of maize.”
He, however, noted that 2019 remained a challenging year on account of the country’s low maize harvest of around two million tonnes.
“It’s quite a very interesting and challenging year this year, obviously, where we are only expecting two million metric tonnes compared to the previous years where we had three point something and so forth. This time around, I think there is a reduction in terms of supply to the market,” said Chintala.