Beef and sheep prices depict unusual trend: Simonis Storm

04 Apr 2016 11:50am
WINDHOEK, 04 APR (NAMPA) – An unusual trend in producer prices for beef and sheep was observed in the first quarter of 2016.
The average producer price for beef and sheep came in at N.dollars 30.60 and N.dollars 37.3I per kilogramme in January 2016, respectively.
“These were the highest levels achieved in recent times, suggesting the severity of the current drought situation, which has affected agricultural output. We expect this upward trend to persist, and thus accelerate the pace of inflation,” local financial services firm, Simonis Storm Securities warned in its Quarterly Investment Strategy issued on Friday.
Moreover, the number of live cattle exported to South Africa (SA) declined sharply by 77.2 per cent year on year (y-o-y) to 4 061 at the end of February 2016. This is the lowest level reached in recent times, once again reaffirming the impact of the drought situation on agricultural output, according to the report.
However, it warned that the revised Sanitary and Phytosanitary (SPS) measures that would govern the importation of livestock into SA could pose dire consequences for Namibia.
SA has notified the World Trade Organisation of SPS measures that would govern the importation of livestock into that country as from 09 May 2016. On 09 November 2015, South Africa published its new import regulations for livestock from Namibia as well as Botswana, Lesotho and Swaziland with a 60-day period reserved for comments. Namibia submitted comments on the new regulations on 08 January 2016.
“Should these measures enter into force in their current form, Namibia’s export of livestock to SA is likely to come to a standstill, because of the practicality and costs involved in compliance thereof. We hope the current negotiations between the two states would culminate into some level of flexibility,” the report stated.
Meanwhile, in November last year, the Meat Board of Namibia announced that it approved three new conditions for the export of livestock to South Africa. These conditions were set to give further insurance that the exports of Namibian animals comply with the South African policy for livestock imports. One of the conditions was that Namibian animals may not come into contact with South African animals, except at the time of slaughtering. A further condition was set that will prevent Namibian livestock from being exported to an intermediary destination first, except where that destination forms an integral part of the final destination and has a proved traceability to the final destination.
“The impact of the drought would continue to exert pressure on agricultural output and exports. Namib Mills has already announced price increases for maize products for two consecutive times earlier this year due to low production and high import cost,” the report added.
Namibia’s livestock sector, on which some 70 per cent of its about 2.5 million inhabitants depend, exports on average 160 000 weaner cattle, 240 000 goats and 100 000 sheep to South Africa each year.
When the stringent veterinary import conditions for the export of all Namibian livestock were introduced in May 2014, only a few live animals could be exported, causing severe losses for farmers. Namibia then requested South Africa to postpone the implementation of the new veterinary conditions.