Financial Gazette (Harare)
20 March 2008
Harare — THE country will have to cough out US$120 million to import about 300,000 tonnes of wheat needed to take it to the next harvest around November, a senior National Bakers Association (NBA) official revealed this week.
David Govere, the NBA official and Employers Confederation of Zimbabwe (EMCOZ) senior vice-president said the country has run out of wheat, resulting in serious bread shortages hitting the market.
"At a consumption rate of about 40 000 tonnes of wheat per month Zimbabwe needs just over 300 000 tonnes of wheat to the next harvest, which will cost about $120 million United States dollars while simultaneously pursuing an aggressive wheat farming programme that will see the country producing the 500 000 tonnes required annually.
"Without this strategy the bread shortage problem will persist," said Govere.
Players in the milling and baking industries started alerting authorities round about mid December 2007 that based on the current consumption of 7500 tonnes of wheat per week or 30 000 tonnes per month the wheat stocks would last up to March.
Meanwhile the year's wheat planting season starts in May and the harvest only comes in mid November, but will require drying and transportation to result in flour being delivered to the bakeries in the first week of December.
This is a pattern known every year.
"All industry players suggested that it was necessary to start building imports to cover the seven months from April to October. Much to the surprise of all industry players government decided to allocate the currency available to import flour directly under the BACOSSI (Basic Commodities Supply Side Intervention Facility) arrangement to one baker," said Govere.
Whereas National Incomes and Pricing Commission (NIPC) has reached an agreement with bakers to wholesale bread at about $7 million per loaf, traders taking advantage of the shortage are selling the same bread at between $15 and $25 million dollars with no end in sight for this upward spiral.
"What we need is to increase bread production by earmarking around 15 million United States dollars every month for the wheat account, then we will be able to import around 40 000 tonnes of wheat monthly, which will see all pricing madness disappear and this time we need to channel all the available funds to GMB (Grain Marketing Board) so that they play their national role of equitable distribution.
"Another distortion that must be removed is the PSIF or BACOSSI type initiative because it creates two categories, that is, those that accessed the cheap funds and those that did not.
"By restoring GMB's role, we will not only have leveled the playing field but used an institution fully accountable to the authorities in terms of the national distribution system.
"NIPC efforts have been hampered by the skewed distribution and the uneven playfield amongst industry players but there is an opportunity to bring all the players together and use the bread industry as an example for business sanity," said the EMCOZ senior vice president.
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