Maize meal price spiral

The continuing spiral of the price of maize meal, Zambia’s staple diet is a matter that requires very urgent, practical and meaningful attention to ensure that all citizens have something to eat and therefore the means to a meaningful livelihood.

The failure by government to provide an effective, informed and knowledgeable statement on the status of stock of maize in the country seems to serve as a trigger for speculation which unfortunately hits the poorest in the pocket.

The situation has not been helped by the massive movements of maize stocks from rural areas to urban areas for storage and then re-transported to rural mills.  The poor management of stocks will clearly force the price of mealie meal up unless government is once again prepared to subsidise.

It follows therefore that government must work with all stakeholders including farmers Union and grain traders to arrive at working solutions to the interminable and seemingly intractable issue of arriving at maize and maize meal price that is acceptable to all parties to achieve a long term price stabilization agreement.

Clearly the so-called consensus agreement on maize and mealie meal prices reached earlier this month is not feasible and has therefore not been observed.  The initial agreement was that the price of maize into meal was to be K1600 per metric ton and the price of mealie meal to the consumer will be not more than K65 per 25kg bag and not more than K45 per 25kg roller meal.  At the same the price of maize bran was established at K650 per metric ton.

As we understand it the Ministry of Agriculture and Livestock was to allow the export of maize and wheat bran for a limited period but the export of maize and other maize products was banned.

Given this scenario two things emerge. Firstly, that the supplier of last recourse is the Food Reserve Agency which has ability of maintaining a price consistency and secondly, that millers would only source from FRA to ensure this stability.  This of course was unrealistic because within a short time of agreement maize prices have changed and millers are now seeking supplies from other sources.

While it is generally agreed that maize is a political crop it must also be accepted that maize is an economic product that must respond to market conditions.  It is unrealistic to expect millers to buy supplies at K85 per 50Kg bag and then sell the maize at about the same price.  This would defeat logic because millers have their own operating costs which include labour, transport, electricity and the ordinary business fixed and variable costs.

In essence therefore there is no way the government can have its cake and eat it.  The demand for price stabilization or price control is one route that has been advocated by many politicians but which if implemented will have the direct opposite effect of pushing the mealie meal prices even higher because shortages will result and where shortages exist prices have the tendency of spiraling to economic levels.

We have said before and we would want to repeat today that government must as matter of urgency and necessity institute a standing Task Force.


Categorized | Editorial

One Response to “Maize meal price spiral”

  1. Katuba old Boys says:

    The issue of meal mealie prices going up is something the PF must address quickly and resolve . We are aware that a similar situation forced the former rulling Govt out of power


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