In a move that is expected to reduce\ mealie meal prices, Government has offered millers maize from the Food Reserve Agency which they will purchase at K85 per 50kg bag instead of K130 on the open market, Millers Association of Zambia president Allan Sakala has revealed.
Mr Sakala said in an interview that this measure would be effected on November 1.
He said millers and Agriculture minister Given Lubinda held a meeting on Thursday where they resolved to buy maize from FRA at K85 per 50kg from the current K130 purchased from the open market.
Mr Sakala explained that a 50kg of maize produces one bag of breakfast mealie meal at 24.38 kg while the same 50kg produces 19.2 kgs of roller meal and 7.5 kgs of maize bran.
“People would think that it produces two bags of mealie meal but our plants are made in such a manner that mealie meal is produced at 85 percent which is 33 kilogrammes of the 50 kg bag.
“Now this mealie meal has to be divided into breakfast and roller meal so out of 33 kilograms of mealie meal, we are only able to produce 24.3kg of breakfast and 19kgs of roller meal and 7.5 kgs of maize bran,” he said.
And Mr Sakala said Government appreciated the efforts of millers after sending inspectors to investigate individual millers and acknowledging the challenges they faced.
“We told them our challenges and they appreciated the extent and have offered to sell us maize at K85 per 50kg ; our cry was that the price was increasing,” he said.
Mr Sakala said millers accepted Governments offer and that they would be selling a K25 kg of mealie meal at less than K70 wholesale price.
He said even if millers would be purchasing maize at that price, they would only be able to make K1.40 profits per 50kg.
“Millers have accepted that we are going to be getting maize starting November 1 from the Food Reserve Agency and a 25kg of breakfast mealie meal will not exceed K70 as a wholesale price.
‘‘We have been very patient and avoided making comments because we have engaged Government to come and scrutinize our costs,” he said.
Meanwhile, Mr Sakala said there was no need for anyone to threaten millers with being fined because they operated in a liberal market.
Mr Sakala said millers were private entities which invested their money and need returns out of their investments.
“This is a liberal market and no such threats should be issued; these are private entities which invested their money and need returns but because we are aware that we operate in a very sensitive economy and that is why we consult Government,” he said.
Consumer Competition and Protection Commission (CCPC) said all milling companies that colluded to increase price of mealie meal risked being fined a maximum of 10 percent of their annual turnovers if found wanting when investigations are concluded.