White maize floor price rise to cushion farmers

The Namibian Agronomic Board (NAB) has announced a new white maize floor price of N$5 625,89 from 10 to 23 July.

According to a notice signed by NAB chief executive officer Fidelis Mwazi, addressed to white maize producers, the increase pertains to the white maize marketing agreement.

“Should the calculated South African Futures Exchange (Safex) spot price weighted average for the previous fortnight period be higher than the staggered floor price, the Safex fortnight weighted average price formula hall is implemented,” he said.

Mwazi said the final Safex fortnight weighted average price for the previous two weeks of N$5 574,60 per tonne is lower than the staggered floor price of N$5 625,89 per tonne for the period from 23 June to 6 July by N$51,29 per tonne.

“Therefore the staggered floor price of N$5 625,89 per tonne will be the floor price applicable for white maize to be bought or delivered within the fortnight of 10 to 23 July,” he said.

Explaining the implications of the floor price increase, Loide Uahengo, the NAB’s agronomy market manager, said this is to compensate producers for storage costs.

“The potential of an increase every two weeks is known at the beginning of the marketing season to cushion farmers for storage,” she said.

Uahengo, however, said while this means more money to producers, it does not translate to an increase in food prices.

“It is agreed at the beginning of the marketing season around May that farmers will get increases in the price of maize every week, and this is factored in when the shelf price of the final product is calculated,” she said.

She said as maize is a controlled product, like mahangu, the border is closed for the importation of the product around May until producers have sold their maize.

Mwazi said the NAB will continue monitoring the Safex fortnight weighted average price for maize for the next two weeks and notify the industry accordingly should the price be lower than the Safex weighted average floor price for the same period.

He said the processor and producer levy of 1,4% should be calculated based on the subtotal of the staggered floor price of N$5 431,59, which excludes the import levy differential.

“The producer levy to be deducted from the producer price by all processors is N$76,04 per tonne,” he said.
– email: matthew@namibian.com.na