EXPORT prices for Namibian beef have been adversely affected by the depreciation of the Euro, and beef prices in Europe have also declined on the back of lowered disposable income levels, according to the latest statistics.
These figures are based on the latest quarterly price predictions by the Bureau for Food and Agricultural Policy (BFAP), which were issued by the Meat Corporation of Namibia (Meatco) on Wednesday.
In the company’s newsletter, Meatco’s Communications Officer Monja Viljoen said European beef prices have declined on the back of disposable income levels that are under pressure as taxes are increased to finance sovereign debt whilst the economy remains weak.
Additionally, the demand for weaners in South Africa (SA) increased on the back of much lower feed prices, which also drives local weaner prices.
‘The impact of this perfect storm on the weaner market is projected to ease within the next year, as SA yellow maize prices are projected to increase in 2011 due to lower plantings. Hence, the demand for weaners is expected to soften in 2011,’ said Viljoen.
She cautioned that the current economic conditions should, however, be seen as a worst-case scenario for Meatco.
‘Should the SA Reserve Bank and the government agree to artificially depreciate the Rand to stimulate growth and employment opportunities, the situation could look very different,’ Viljoen said.
The BFAP forecasts a 2,23 per cent increase in Namibian carcass prices (A2/A3) from 2010 to 2011, and a further 6,19 per cent increase from 2011 to 2012.
Weaner prices, on the other hand, are expected to decrease with 1,6 per cent from 2010 to 2011, and increase by 5,6 per cent from 2011 to 2012.
‘SA carcass prices are expected to come under significant levels of pressure as supply increases in the third quarter of 2011. Although the SA economy is expected to grow consistently over time, the rate of increase of meat prices will be dampened by the relative strong exchange rate,’ she said.
According to Viljoen, Meatco’s prices are thus expected to move sideward in the near future.
BFAP is an independent research unit involving the University of Pretoria, the University of Stellenbosch, the Department of Agriculture at the Western Cape and the Food and
Agricultural Policy Research Institute (FAPRI).
The bureau uses macro economic factors such as oil prices, exchange rates and soy and maize prices to predict movements in prices. – Nampa
