Monday, 18 June 2012 13:33

Offshore Phosphates Could Lower Food Prices

Namibian Marine Phosphate is poised to play an important role in enhancing food security in Namibia‚ the Southern African Development Community and Africa through its Sandpiper project off the coast of Namibia.

Lower input costs would offer an affordable alternative for small-scale farming and consumers at a time when skyrocketing food prices are high on the agenda of government.

Phosphates are an essential component in the production of fertilisers‚ and if fertiliser costs come down‚ farmers can expand production and prices can be reduced for consumers due to the extra supply.

The latest National Agricultural Marketing Council Food Price Monitor shows that since July 2008‚ the poor have suffered far more than the rich when it comes to the cost of a basic food basket - which has risen from 29% of household income to 36.4% for the poorest 30% of the population‚ versus an increase from just 2.3% to 2.9% for the wealthiest 30%.

ANC secretary-general Gwede Mantashe said on Wednesday that any land distribution to emerging farmers claiming land must go together with the ability to produce food and secure food supplies.

"It is no coincidence that food prices are high on the agenda for government‚" says Prof Andre Jooste‚ head of market and economic research centre at the National Agricultural Marketing Council. "Solutions and opportunities are needed to design better policies and guide investment‚ and a good start will be a better understanding of the value chain."

The Democratic Alliance (DA) said in May that one-third of households reported running out of money to buy food and one out of five children said they were hungry because of this.

The National Agricultural Marketing Council reports diammonium phosphate prices have lifted 172.6% from January 2006 to January 2012‚ while fertiliser makes up 20%-30% of variable costs for farmers.

"A farmer will produce when profitable. The biggest cost is fertiliser‚ then fuel‚" says Jooste.

David Wellbeloved‚ project general manager for Namibia Marine Phosphate‚ says there is scope to export to Africa at lower cost.

High-end Moroccan rock phosphate is priced at $200 a tonne‚ but the rock to be produced from the marine deposit will sell at about $140 a tonne.

The Sandpiper project should ultimately produce three million tonnes a year and capacity building is expected to take three years. Global consumption for direct application of rock phosphate is about six million tonnes. The global traded rock phosphate market is about 30 million tonnes.

He says the company is busy exploring export opportunities to South America‚ Malaysia‚ Indonesia‚ Australia and New Zealand as well.

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