No control over milk prices: NAU

13 Nov 2013 17:40pm
WINDHOEK, 12 NOV (NAMPA) – There is currently no control over milk prices in Namibia, and retailers can sell milk to consumers at any price of their choosing, an industry insider confirmed on Tuesday.
Manager of Commodities at the Namibia Agriculture Union (NAU) Harald Margraff told Nampa in an interview that there is currently no mechanism in place to determine milk prices in the industry.
“Yes, there is currently no control over milk prices and retailers can put on their own mark-up prices,” he stressed.
Presently, a litre of fresh milk from Namibia Dairies sells at N.dollars 14.99 compared to a litre of Clover long-life milk which sells at N.dollars 13.99 per litre, and Parmalat Ever Fresh ultra-high-temperature (UHT) milk at N.dollars 11.99 per litre. UHT or long-life milk has a shelve life of about six to nine months until opened.
Parmalat is a multinational Italian dairy and food corporation and is the leading global company in the production of UHT milk, while Clover is a brand from South Africa.
The Chairperson of the Dairy Producers’ Association (DPA) of Namibia, Japie Engelbrecht on Monday expressed concern that the drought situation has had negative consequences on the cost of producing raw milk and consumers will now have to dig deeper in their pockets to buy milk.
“While consumers must be cognizant of the factors impacting on the price of dairy products, they must also bear in mind that prices on the shelves are not prescribed by the producers, nor the manufacturers of dairy products,” he noted.
Engelbrecht said the scarcity and high cost of fodder is a major factor contributing to the current cost of dairy production in Namibia, adding that these factors have a ripple effect on the entire value chain.
He stressed that even with the increased production costs, Namibian producers have not yet negotiated for an increase in the price of raw milk.
Instead, local dairy producers agreed on a major price decrease from April 2013 to June 2013 in order to survive the uneven playing field in which they are expected to compete against major international producers.
In addition, local producers are not allowed to use antibiotics like Rumensin or any other growth hormones such as Recombinant bovine somatotropin (rBST) to artificially increase feed conversion ratios in their cows so as to obtain higher milk production volumes.
Engelbrecth commended the Namibian Government for the support measures that it has put in place to help alleviate the current dilemma in the dairy industry.
“The dilemma is far from over as we remain under pressure, and we appeal to the consumers for their ongoing support. I also appeal to all role players to assist in the efficient implementation of government measures to ensure competitive behaviour within the dairy industry,” added Engelbrecht.
Cabinet granted approval to the Ministry of Trade and Industry in July this year to proceed and institute interim quantitative restrictions on the importing of dairy products into the country.
The latter came into effect on 16 October 2013.
Members of the dairy sector were required to register for the intended Dairy Market-Share Promotion Scheme.
The aim of the scheme is to promote the local production of dairy products; protect the industry against the importing of low-priced dairy products; and ensure a constant supply of dairy products in the case of disease or shortages in countries Namibia imports from.