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Price relief expected on stronger Rand

Price relief expected on stronger Rand

The strengthening South African Rand is likely to put millers in a position to reduce the local shelf price of white maize as the Rand import price for unprocessed maize comes down.
The Namibia Agronomic Board CEO, Christoph Brock this week told the Economist that speculation is rife that the shelf price of maize meal might possibly also be cut back.
“It will be business as usual as the country [will be able] to import the normal 80,000 tonnes of maize even if it is likely to come from Brazil or Mexico,” Brock said.
It is not so much a question of supply but price as all maize is traded as futures on the SAFEX market, three months in advance. The price to pay at the future date is determined at the current international market prices as dictated by the Rand/USD exchange rate.
According to the Ministry of Agriculture, Water and Forestry’s food security and crop prospects report released last week, the situation is under control as there are no major problems experienced in importing cereals.
The Agro Marketing & Trade Agency’s recent requests for cereal for the National Strategic Food Reserve has also been met thanks to the governments Green Scheme initiative, Brock added.
The report states that the millers are confident that there will be no major price increase in the next few months except in the event of another significant weakening of the South African Rand by which local prices are determined.
Local millers normally import all their cereals from South Africa. This, Brock said will continue unabated as local millers, the likes of Bokomo and Namib Mills enjoy relaxed relations with South African suppliers for importing maize.However, it is expected that the import of maize will be slightly higher due to the lack of sorghum at the household level in rural areas. Typically Namibia consumes 200,000 tonnes of maize in a year.
The national aggregate coarse grain production of white maize, sorghum, pearl millet and wheat is estimated at 80,000 metric tonnes. This consists of 46,400 tonnes of white maize, 19,400 tonnes of pearl millet, 1500 tonnes of sorghum and 12,700 tonnes of wheat.
Dry land or rain fed crops contributes an estimate of 75,000 tonnes to the national harvest.
Estimates show a slight improvement in last season’s harvest but it is till below the average production.
The food security report shows that despite the poor rainfall and the fact that communal farmers only cultivated half of their crop fields, their maize harvest is better than the previous season, up 18% but still 31% below average.
This slight improvement is result of a small increase in the harvest from most of the major crop producing regions, except Zambezi and Oshana.
Maize production in the communal areas of Zambezi, Kavango East and Kavango West, is down 16% and 68% below average’
On the other hand, the harvest from commercial farms is 23% higher and only 22% below average.
It was noted that many commercial dry land maize producers had only covered about 50% of their crop fields in fear of a similar crop failure as in the previous season.
Overall, the current domestic cereal stock is only about 34% of total requirements.

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