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Friday, 28 November 2008

Ministerial Statement : Mealie Meal Prices

Last week's Ministerial Statement on mealie meal prices by Minister of Agriculture and Co-operatives Dr Brian Chituwo :

Madam Speaker, I would like to thank you for allowing me to give the maize stock levels and their impact on mealie meal prices in the country.

The House may be aware that the country produced about 1.2 million metric tonnes of maize for the season 2007/08 compared to 1.3 million metric tonnes for the previous season, 2006/07.

Given the increasing consumption rate of maize products in the country, there has been an overwhelming demand for the product. This has resulted in the speculation as to whether or not the nation has enough maize stocks to last up to the next harvest. This speculation has resulted in most mealie meal traders quoting very high prices of maize meal, in some cases to as high as K70,000 per 25 kg of breakfast meal. Our view, as a Government, is that these high prices of mealie meal are not justified in reaching such high levels.

The verification exercise by my ministry on maize stocks held by millers in Lusaka, Copperbelt and Northern provinces shows an exaggerated picture of the mealie meal prices in these areas. As we will be seeing from the schedule which I will lay on the Table for study and record, in Lusaka, the wholesale price of a 25 kg bag of breakfast mealie meal ranges from K50,000 to K54,000 while that of roller meal ranges from K38,000 to K44,000 between visited milling plant.

The recommended price for retail for breakfast range from K52,000 to K57,000 per 25 kg while that of roller meal ranges from K44,00 to K47,000. It is on the Copperbelt where the prices are higher. It is clear from the figure that whereas millers in Lusaka have lower recommended retail prices, it is the traders that exaggerate these prices. Even the transport cost should not normally push the prices to these unjustified levels.

The ministry has the responsibility to present factual figures on the current maize stocks in the country in order to remove unnecessary speculations. The national maize stock position as at 13th November, 2008 is as follows:

Millers Association of Zambia : 47,000 tonnes

Grain Traders Association of Zambia : 45,000 tonnes

Food Reserve Agency : 116,000 tonnes

Total : 208,000 tonnes

When maize held by other millers and traders who are not members of these associations is added, the country has sufficient stocks which will last up to four months given the national monthly consumption rate of 60,000 metric tonnes of maize. This national consumption has taken into account human, stock feed, breweries and other industrial use requirements.

The Ministry of Agriculture and Co-operatives is satisfied that the maize stocks available will last up to February, 2009. Meanwhile, the Food Reserve Agency has been directed to offload appropriate quantities of maize from the reserves to the millers in order to stabilise the prices of the commodity. However, in order to forestall any possible deficit in maize stocks to be experienced, my ministry has directed the Food Reserve Agency, further, to facilitate importation of about 100,000 metric tonnes of non-GMO maize together with millers and grain traders. Further, the ministry is currently issuing import permits for this purpose.

I would also like to inform this august House that there is very little non-GMO maize available in South Africa and, therefore, this imported maize may attract a high premium price. However, it should be noted that there is no duty on maize imported from the SADC or COMESA Region.

In order to lower the landed price of maize and make the price of mealie meal affordable to the consumers, the Ministry of Agriculture and Co-operatives will makefurther consultations with the Ministry of Finance and National Planning on the duty waiver on all maize stocks that would be sourced from outside the region. The Ministry of Agriculture and Co-operatives has put in place measures to monitor the GMO status and other pytosanitary requirements on the imports.

I wish to assure this august House that my ministry will continue to monitor the maize stocks and price situation with a view to taking necessary corrective measures whenever this is required. This country is assured of food security at affordable mealie meal prices.

The Movement for Multiparty Democracy (MMD), through the newly elected President, His Excellency Mr Rupiah B. Banda, is committed to ensuring that the food security for the Zambian people, particularly the vulnerable and poor, is sustained at affordable prices. The Presidential Speech clearly focuses on the priorities of the MMD Government as being on education, health and food security in order to improve the lives of our people.

The above measures are meant to translate the Government’s commitment towards this goal. Working together with all stakeholders, I am sure we can achieve this goal – yes we can.

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