NAB sets fortnight mill door price for wheat

The Namibian Agronomic Board (NAB) has set N$6 972,82 per tonne as the floor price for B1 wheat purchased during the period 10 to 23 January.

According to a notice to wheat producers and millers in Namibia issued by NAB chief executive officer Fidelis Mwazi Thursday, this is based on the 2022/23 Wheat Marketing agreement which states that should the fortnight weighted average floor price (Safex spot price plus Deep Sea) for the previous fortnight be higher than the five year average floor price on 30 October 2022, then the new floor price formula for B1 wheat grain for the next two weeks shall be determined based on a combination of the Safex spot price and Deep Sea formulas.

According to Mwazi, this agreement is to protect grain producers against storage costs and fluctuating floor prices as millers might have limited storage capacity to take in all the grain produced and delivered by farmers.

“This floor (mill door) price is subject to changes every fortnight and hence not fixed for the entire marketing season.

As per calculations done, the five-year average floor price of N$6 972,82 per tonne for the 2023/24 marketing season is higher than the calculated fortnight weighted average floor price for the previous two weeks – from 27 December 2023 to 9 January 2024 – of N$6 861,17 per tonne by 5% or N$350 per tonne.

“Therefore, the five-year average floor price of N$6 972,82 per tonne will be the floor price applicable for B1 wheat grain purchased/paid during the period 10-23 January 2024. This price is inclusive of the producer levy,” Mwazi noted.

He further said the NAB producer levy of 1,4% (N$97,62 per tonne) calculated based on the five-year average floor price must be deducted by the processors from the floor price and paid over to NAB and the board will continue monitoring the wheat fortnight average floor price for the next two weeks and notify the industry accordingly should the price be higher than the five-year average floor price.