Pap is no longer the staple

With more price hikes in the next few months, maize meal will become too expensive to remain Namibia’s staple food and Namibian consumers are likely to start buying cheaper food like bread, pasta and rice. Bokomo Namibia has confirmed that it will increase its maize prices by 12% on February 8 and a further increase of 15% will be made on March 7. Responding to questions from Namibian Sun, Bokomo Namibia CEO Hubertus Hamm said the main reason for the increase in maize prices was 170% increase in the maize price over the last 12 months on SAFEX, the commodity exchange in South Africa. Hamm explained that maize prices had increased by 11.3% in February 2014 while in September 2014 the prices fell by 2.5%. In March last year the prices increased again by 18.9% and two further increases will follow in February and March this year. According to Hamm the increase was also driven by the current drought and low production volumes. “As local demand outstrips supply, the pricing is changing from an export parity price to import parity price due to local shortages. The import parity price is further aggravated by the devaluation of the Namibian dollar against the US dollar,” he said. The value of the Namibian dollar against the US dollar has dropped by 65% since 2014. Against the euro, it has dropped 38%. Hamm said the implementation of a 5% import levy last year by the Ministry of Agriculture, Water and Forestry on the Cost, Insurance and Freight (CIF) price of maize was another reason for the increase in maize prices. He said white maize surpluses are only produced in a few countries and therefore it is difficult to import it from overseas. Currently only American and Mexican maize are available, at premium prices. “Depending on the South African harvest and the demand in SADC we will possibly have a maize shortage towards the end of 2016 or early 2017.” As the maize price rises consumers will turn to more affordable staple foods like rice, pasta or bread. “It is therefore difficult to predict whether maize demand will come under pressure due to the high price.” According to Hamm wheat prices will increase by 7.5% during February/March this year. The price of wheat increased by 2.3% in February 2014 and by September 2014 the prices again increased by 2.9%. By March last year the prices increased by 5.85%. Pasta prices will increase by 11% this month and next month. Pasta prices increased by 5% in February 2014 and in March last year they increased by 6.28%. Hamm said over the past two years wheat prices had risen moderately due to the devaluation of the local currency being compensated by global raw material prices. Global demand for wheat remains low and there is a lot of wheat available in the international market. The lower global prices are however eroded by the devaluation of the Namibian dollar, he said. “Considering the devaluation of the Namibian dollar the country has been fortunate that internal wheat and shipping prices are at an all-time low, otherwise price increases would have been significantly higher.” According to him there will be no shortage of wheat and pasta due to the large global stockpiles. Namib Mills will today announce its price increases on products that will come into effect on February 23. ELLANIE SMIT