WINDHOEK: The prices of maize meal, wheat flour and pasta are expected to increase between five and six per cent from 20 August this year. Speaking at the media briefing here on Tuesday, Namib Mills Managing Director Ian Collard said the prices are determined by the supply and demand, and market sentiment.

“We however want to warn that further increases are imminent especially on maize meal. We cannot predict the effect that this will have on wheat prices. Our guest is that it will also increase,” Collard said.
He added that the food security of Namibia is at no stage under threat as the miller (Namib Mills) has already procured enough maize to see the country through to the next harvest, regarding maize and wheat .

Collard stressed that most of the supply contracts were negotiated on physical delivery and a price formula, not a fixed price, adding that where a fixed price was negotiated, financial instruments were utilised to cancel the price risk.

Collard noted that although China is the biggest consumer of maize , the United State of America (USA) remains the biggest exporter of Maize in the world and therefore they determine the price. He said the world usage of maize meal is in the region of 870 million tons, of which the USA produces about 380 million tons.

“Although, Southern Africa had a reasonably good harvest, which was also hampered by drought, the United States price still influences local prices. Local prices in the region are determined on Safex and influence all the surrounding Southern African countries,” Collard said.

He stressed that the South Africa is exposed to the global trends and will have to import maize later in the year as the local harvest of 11 million tons is not enough for the region’s consumption. Collard said Namibia had a bumper harvest, but remain a net importer of maize, with the expected harvest of 75 000 tons this year while the annual consumption is expected at 120 000 tons.

He noted that although there is no major shortage on wheat production the world over, there were still some major increases on international wheat prices in the wake of the maize prices, due to the drought in USA.

The world’s annual consumption of wheat is about 675 millions tons. Collard said wheat is used mainly for baking purposes throughout the world and maize (yellow maize) predominantly for animal feeds.
He stressed that the wheat serves as substitute for Maize in animal feeds, hence the sharp increases in prices.

Compared to the previous year, Collard said there are no major problems regarding the wheat harvest and there is, however smaller or back to normal harvest especially in Australia which normally produces about 22 million tons on average.

He said the pasta which manufactured from wheat flour, the prices increase are inevitable when the price of wheat increases. “The Namibian inflation rate of the past year is in the region of 6.5 per cent,. We therefore have to increase the milling margins to compensate for renumeration increases, electricity increases and others,” Collard said.

(edited)WINDHOEK; The prices of maize meal, wheat flour and pasta are expected to increase by between five and six per cent from 20 August this year. Speaking at a media briefing here on Tuesday, Namib Mills Managing Director (MD) Ian Collard said the prices are determined by supply and demand, as well as market sentiment.

He said the current global economic difficulties has lead to less consumption, which in turn decreases demand and, as a result end prices. “We want to warn that further increases are imminent, especially on maize meal. We cannot predict the effect that this will have on wheat prices. Our guest is that it will also increase,” he stated.

He added that Namibia’s food security will at no stage be under threat as the miller (Namib Mills) has already procured enough maize to see the country through to the next harvest. Collard stressed that most of the supply contracts were negotiated on physical delivery and a price formula, not a fixed price. He added that where a fixed price was negotiated, financial instruments were utilised to cancel the price risk.

Collard noted that although China is the biggest consumer of maize, the United States of America (USA) remains the biggest exporter of maize in the world, and therefore they determine the price.
As the USA experienced a severe drought in the past few weeks, their harvest and ultimately the price was affected.

World-wide usage of maize meal is in the region of 870 million tonnes, of which the USA produces about 380 million tonnes. “Although Southern Africa had a reasonably good harvest, which was also hampered by drought, the United States price still influences local prices,” Collard said.

He stressed that South Africa is exposed to global trends and will have to import maize later in the year as the local harvest of 11 million tonnes is not enough for the region’s consumption.

Collard further said Namibia had a bumper harvest, but remains a net importer of maize, with the expected harvest at 75 000 tonnes this year, while annual consumption is expected to be 120 000 tons.
He noted that although there is no major shortage on wheat production the world over, there were still some major increases on international wheat prices in the wake of the maize prices due to the drought in USA.

The world’s annual consumption of wheat is about 675 million tonnes. Compared to last year, Collard said, there are no major problems regarding the wheat harvest but there is, however, smaller or ‘back to normal’ harvests, especially in Australia which normally produces about 22 million tonnees on average.
He said as pasta is manufactured from wheat flour, prices increases there are also inevitable when the price of wheat increases.

“The Namibian inflation rate of the past year is in the region of 6.5 per cent. We therefore have to increase the milling margins to compensate for remuneration increases, electricity increases and others,” Collard said.