Lekopanye Mooketsi
15 April 2008
Local millers have been hard hit by escalating wheat prices. The Sales Manager of the Bolux Group, Lazarus Lekgoanyana, says the rising wheat prices have affected their business considerably.
Wheat prices have shot up from about R1,900 (P1,577) per tonne in January last year to about R4,300(P3,569) per tonne today. Lekgoanyana says they have been trying to absorb the increasing prices but cannot afford to do so any longer. "We are gradually passing it on to the consumer," he says. "The increases have been eroding our margins."
He says as a result of these increases, the price of their flour products, as well as those for macaroni, spaghetti, biscuits and bread, are going to go up significantly. "It is going to affect the consumers' basket drastically," Lekgoanyana says.
Lekgoanyana attributes the steep increase in the price of wheat to a number of factors, chief among them being the global food price increases that have provoked social unrest in some low-income countries.
Climatic change has also resulted in reduced harvests while demand for bio-diesels has affected wheat supply in producer countries. Another reason could be the ever-increasing fuel prices.
Another challenge in Botswana is the limited market. Lekoanyana says they face competition from South African producers who can afford to charge lower prices.
Botswana's milling industry is also faced with a shortage of skilled manpower. Botswana sources its wheat supplies from South Africa, but that country is also experiencing shortages at the moment. Infact, the situation is so serious in South Africa that a loaf of bread costs up to R10 (P8.3).
Lekgoanyana says while they could buy wheat cheaply from countries such as Canada, sea transportation costs are prohibitive.
He said maybe it is time that Botswana farmers consider growing wheat, although he pointed out that climatic conditions might not be conducive.
A little solace for consumers is that Lekgoanyana says owing to a sufficient harvest of maize, the price of maize meal will remain stable, adding that they have not increased the price of maize meal since April last year. He says while the harvest of maize has always been stable, "with wheat it is unpredictable".
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