NAMIBIA – The Namibian Agronomic Board (NAB) has set the floor price for B1 wheat grain at N$6 972,82 (US$37,700) per tonne for the period from 1 to 14 November, aimed to cushion producers against the rising cost of storage before delivery to millers.
This was revealed in a memorandum signed by Fidelis Mwazi, the Chief Executive Officer of NAB while addressing wheat grain producers and millers in Namibia.
The NAB said the new floor price formula for B1 wheat grain for the next two weeks would be determined based on a combination of the Safex spot price and deep sea formulas should the fortnight weighted average price for the previous fortnight be higher than the five-year average floor price on 30 October 2022.
This is designed to cushion producers against the rising cost of storage before delivery to millers, which may have limited storage facilities.
Mwazi highlighted that the five-year average floor price of N$6 972,82 per tonne for the 2023/24 marketing season is higher than the calculated fortnight weighted average floor price (mill door floor price) for the previous two weeks (18 to 32 October) of N$6 861,39 per tonne by 5%, or N$350 per tonne.
He declared that the five-year average floor price of N$6 972,82 per tonne, inclusive of the producer levy, will be the floor price applicable for B1 wheat grain purchased/paid for during the period of 1 to 14 November.
“The board will continue monitoring the wheat fortnight weighted average floor price for the next two weeks and notify the sector accordingly should this price be higher than the five-year average floor price,” Mwazi said.
The decree comes after the recent move by the government to protect maize producers.
In September, (NAB) set N$ 6,680,19 (US$36,117) per tonne as the floor price for white maize bought or delivered between 18 September and 1 October.
According to the NAB, the rationale behind the potential floor price increases every two weeks is to cushion farmers and compensate them for storage costs.
This, however, does not result in an increase in food prices as the formula for implementing the increases is agreed to at the beginning of the year, the agency noted.
