The Ministry of Agriculture is calling for all millers to refrain from arbitrary increases in price of controlled agronomic products such as maize, wheat and mahangu.
This comes after Namib Mills,this week, announced a price increase of 4% effective on the 13th of July 2015 on maize, wheat, pasta and mahangu products.
The price increase is initiated by the increase of levies on the above mentioned commodities from 0.95% to 5%, as per Government Gazette No 5681 dated 27 February 2015.
According to Namib Mills discussions and correspondence with the Ministry of Agriculture, Water and Forestry regarding the decrease of commodities levies were not timeous enough to lower it to the recommended 1.4% for the current commodity harvesting year in lieu of the current drought.
“A guarantee was requested by the relevant Ministry from millers in Namibia not to increase prices of said products for the remainder of the drought in turn for lowering the levies to 1.4% as recommended. Unfortunately we cannot provide such guarantee as we are exposed to international commodity prices, international exchange rates and international weather conditions. We do not have any control over the above market factors, therefore no guarantee can be provided. Furthermore the prices of soft commodities on the international markets are known for their high volatility, which make any guarantee impossible. This leaves the company with no choice, but to effect a price increase in order to curb further loss of income on the above products due to the higher levies,”said Namib Mills Chief Executive Officer Ian Collard.
Minister of Agriculture, Water and Forestry, Honorable John Mutorwa refuted Namib Mills’ claims and said that with a view to protect consumers from arbitrary price increases during this drought period, the ministry requested millers to provide guarantees that in case the 5% levy was to be lowered, there would be no further unjustified price increases.
Mutorwa stated that the millers declined to provide such guarantees creating the impression that even if the levy was waived, consumers may be subjected to more arbitrary price increases by millers.
He added that the ministry has implemented several measures to protect consumers, farmers and millers in the grain sub-sector including the banning of commercial imports of maize, wheat, mahangu flour to facilitate the viability of local flour millers, and setting quantitative restrictions on the importation of controlled crops such as maize, wheat and mahangu.
The ministry has also called for Southern African Customs Union (SACU) rebates on the import of wheat grain to promote local milling, zero-rating of value added tax (VAT) on maize meal, mahangu meal and bread to lower consumer prices as well as setting up floor-price setting mechanism on grains to encourage local production and milling.
Mutorwa further said that the ministry assures all consumers that, in line with the Agronomic Industry Act 20 of 1992, all measures will be taken to ensure that they are protected from arbitrary price increases by millers or other traders of controlled agronomic products.
The prices of wheat flour; complete mix flour, Polana Pasta, Pasta King, Catering Pasta, Maize Meal, Mahangu of all brands and categories will increase by 4%, as of the 13th of July 2015.