The price of the staple white maize is likely to shoot up after the Namibian Agronomic Board (NAB) set the floor price delivered to millers from 1 to 14 May at N$7 554,37 per tonne.
This was confirmed by NAB spokesperson Loide Uahengo, who said the floor price for local white maize is higher this year compared to last year at N$5 595,00, due to the high demand for white maize in South Africa, where Namibia imports most of its maize from.
"Millers will be expected to put their own mark up, pushing the prices up," she says.
Uahengo said 1 May marks the beginning of the maize marketing season for 2024, when NAB sets a fortnightly maize floor prize.
"The floor price for white maize marketed during the close border period from 1 May is N$ 7 554,29 and will fluctuate every fortnight," she says.
Before that date, the maize prize was calculated daily based on the Import Parity Price.
According to a notice to white maize grain producers and millers issued by NAB chief executive Fidelis Mwazi dated 3 May 2024, in terms of the 2023 white maize marketing agreement, should the calculated South African Futures Exchange (Safex) spot price weighted average for the previous fortnight be higher than the staggered floor price, then the Safex fortnight weighted average price formula shall be implemented.
"This is a way of safeguarding producers against fluctuating prices and storage costs when they have to keep the maize for longer periods, because millers might not have enough storage space to take large amounts of grain," said Mwazi.
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Safex is the futures exchange subsidiary of the Johannesburg Stock Exchange, consisting of two divisions; a financial market division for trading of equity derivatives and an agricultural market division for trading of agricultural derivatives.
According to Mwazi, the final Safex fortnight weighted average floor price for the previous two weeks from 16 to 29 April of N$7 554,37 per tonne, is higher than the Safex staggered floor price of N$5 884,01 per tonne by N$1 670,36 per tonne or 22%.
"Therefore the Safex fortnight weighted average floor price of N$7 554,37 per tonne shall be the applicable floor price for white maize grade 1 bought or delivered within the fortnight of 1 to 14 May 2024," said Mwazi.
He added that NAB will continue monitoring the Safex fortnight weighted average floor price for the upcoming two weeks and notify the industry accordingly should this price be lower than the Safex fortnight weighted average floor price for the same period.
Mwazi said the processor and producer levy of 1,4% should be calculated based on the floor price of N$7 291,87, which excludes the import levy differential and, thus, the producer levy to be deducted from the producer's price by all processors is N$102,09 per tonne.
