By Hilary Mare
THE Meat Corporation of Namibia (Meatco) has informed its producers that its Fixed Price Slaughter Contract (FPSC) will be available until the end of March 2018.
The FPSC was introduced in the middle of last year to assist the producer in producing slaughter oxen and in a further attempt to secure consistent throughput for the Windhoek abattoir
“A decision will be made by Meatco’s management whether to continue with the fixed contracts throughout the ‘peak season’. Further information will be shared accordingly via our various communication channels,” the company said.
A FPSC is a legal agreement, generally made on the trading floor of a futures exchange, to buy or sell a particular commodity at a predetermined price, at a specific time in the future. In this instance the commodity is the slaughter cattle from producers.
The producer signs a legally binding contract to offer a certain amount of slaughter animals to Meatco at a fixed price, at a set point in time. Certain terms and conditions are then also attached to the contract that will be unique to Meatco.
“For the Fixed Price Slaughter Contract, Meatco will release slaughter prices three months prior to the period in which producers will be able to enter into a fixed contract with Meatco. This will be published every Friday, with the regular slaughter prices. The prices will cater for all grades A, AB, B and C. Generally, one week will represent each contract period and the price communicated will be applicable for each week. For each week, there will be a pre-allocated available quota of slaughter animals,” Meatco said when the contract was launched.
Both Meatco and the producer enter into the FPSC with different roles. Meatco undertakes to procure the cattle from the producer, while the producer makes sure the cattle is delivered at an agreed upon date, as stipulated and bound in the contract.
In order to qualify for the price, as per Schedule A, Meatco will verify that a minimum of 90 percent of the cattle of the quantity stated in Schedule A, has been fulfilled by the producer.
Failure to deliver at least 90 percent of the agreed amount of animals as per contract within the delivery period, will result in a penalty of N$2 000 per head of the animals not delivered. Similarly, Meatco will also be penalised, should it fail, by any reason, to accommodate the animals, due to fault on its side.
Animals delivered above 100 percent of the contract will be priced at the normal weekly Meatco Producer Price. The first animals to pass over the carcass scale will be taken to be the signed quantity of animals under this contract.
For any unforeseen reasons, should Meatco not be able to purchase the animals within 14 days after the agreed delivery, it will pay a penalty of N$2 000 per animal, on 90 percent of the agreed amount of cattle. Excluded are Acts of God, which result in a long-term closure of the abattoir, where Meatco at its sole discretion will be able to cancel the contract.
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