REFILE - Exchange rate a great concern to Meatco

26 May 2014 16:30pm
ATTENTION SUBS: story refiled after fixing typo in intro - There (not The)

WINDHOEK, 26 MAY (NAMPA) – There is great uncertainty over whether the Meat Corporation of Namibia (Meatco) will be able continue paying high average prices to livestock producers in the coming months.
Meatco's Chief Financial Officer Nico Weck issued a media release last week, warning that despite the fact that the company’s abattoirs south of the veterinary cordon fence (SVCF) are relatively fully booked for the next three months, the exchange rate remains a great concern to the company as it will have an effect on the producers.
“The great uncertainty at this stage is what will happen with the exchange rate. If the exchange rate continues to weaken, we will have to adjust the producer price accordingly. The stronger the rand, the less we will get out of our high-value markets,” Weck stated.
Meatco paid the highest-ever average producer price during the month of April 2014 – N.dollars 31.00 per kilogramme across all grades.
Weck said the meat marketing company’s market price for beef products is under pressure in most of its markets, and it is slowly but steadily declining as a result of the stronger rand with the expectation that it will remain strong in the medium term.
In contrast, Meatco’s producer price remains stable. Weck warned that if the rand continues to strengthen, there may be a possible decline in the producer price to protect the business margins.
Meatco is also currently in the peak season, as regards to the availability of its beef products. Market prices will increase if scarcity of beef should occur, according to Weck.
With Europeans enjoying summer now, Meatco anticipates a product price increase especially with regards to the high value cuts.
Weck said the company’s ultimate goal is to keep producer prices as stable as possible.
“However, at this stage we cannot guarantee anything,” he added.
For April 2014, Meatco paid more than N.dollars 11.6 million in premiums to its producers, compared to N.dollars 3.5 million last year.
For the year to date, Meatco also paid out N.dollars 30 million in additional premiums to its producers. The average producer price for the year has remained relatively constant at N.dollars 30.92, according to the statement.