Nam poor grain production inflicts pain

NAMIBIANS will feel the pinch of low grain production and failure to manufacture basic inputs locally, as the prices of most food staples go up today.

One of the country’s biggest milling companies, Namib Mills, announced the price changes last week.

According to Namib Mills, the product lines affected are wheat and mahangu products, and rice.

“Namib Mills unfortunately has to inform you that there will be a price increase effective from 12 April 2020,” announced the company’s senior brand manager Marner Bouwer.

He said they were increasing the prices of the finished goods because of inadequate local supply coupled with increases in the cost of importing inputs.

Bouwer said Russia, one of the world’s largest wheat producers, has imposed an export tax on wheat which increased the landed cost of raw wheat. The company is now responding by passing on some of the cost to consumers through price increases.

Wheat is a component in most Namib Mills products.

The Namibian could not determine how much of the burden the company was bearing, but most of its products will be increased by 2-8%.

Due to the country’s inadequate wheat production, Namibia goes as far as Russia and Poland to source wheat. During the 2018/2019 season, Namibia bought 49 853 tonnes, which represents 42% of the country’s wheat needs.

The ministry of agriculture’ cereal supply/demand forecast for the 2020/2021 marketing year indicated that since the start of the current marketing season in May 2020, more commercial imports were received than in previous years.

By the end of December, the country had imported about 29 400 tonnes of cereal consisting of 15 100 tonnes of wheat, 14 000 tonnes of white maize and 500 tonnes of pearl millet (mahangu).

More commercial imports of 238 600 tonnes are expected before the current marketing season ends on 30 April, the ministry projections show, with wheat leading the imports with 134 100 tonnes and maize 104 000 toones and mahangu (500 tonnes).

The total locally produced white maize marketed to registered processors and silos in 2018/19 was 58 020 tonnes (49%), with 59 608 tonnes (51%) imported, according to Agro-Marketing Trading Agency (Amta).

White maize in Namibia is produced under both irrigated and rain-fed conditions, with the rain-fed maize contributing up to 50% of production, according to Amta.

Locally produced wheat marketed during the 2018/19 increased slightly from 6 863 tonnes in the previous year to 7 508 tonnes in 2018/19, while imports increased from 104 244 tonnes to 118 698 tonnes.

Amta also shows that the country imported 931 tonnes of mahangu during the reporting period while millers and silos sourced a total 1,979 tonnes locally.

The locally sourced mahangu tonnage indicates a good harvest in the north-central and Kavango regions. However, this year, there was a locust outbreak in the two regions, which could affect the mahangu and maize harvests for small-scale farmers.

This could impact household food security as most farmers will not harvest enough grain, and the price increases would worsen their plight.

Most small-scale farmers do not have adequate and up-to-standard storage facilities to keep their grain, and depend on Amta to take up their products. However, because of insufficient funds, Amta has failed to absorb all the grain on the market, leaving it to spoil.

Apart from low domestic production of wheat, Namib Mills has indicated that the company is incurring more costs because of interruption in trade.

According to Bouwer, currently the global polyethylene industry is facing supply and shipping constraints, which has significantly affected the supply of packaging material.

“The cost of these raw materials has increased more than 30% since last year,” he said.

Moreover, the cost of production is also affected by increases in the Brent crude oil price.

Last month, fuel prices in Namibia increased by 80 cents for both petrol and diesel, and this month 50 cent