2 July 2012

Zimbabwe: Millers Rule Out Flour Shortages

Photo: Lilian Liang/PlusNews
Street market: Bakers in Zimbabwe want a loaf to cost U.S.$1,20, up from U.S.$1.

THE proposed reintroduction of duty on imported wheat flour will not result in flour shortages, the Grain Millers' Association of Zimbabwe chairman Mr Tafadzwa Musarara has said, since Zimbabwean millers have up to six months supply of wheat grain in stock.

Zimbabwe usually imports grain, rather than flour, with the local millers doing the milling. A small amount of flour is sometimes imported, but not usually for the baking industry.

Zimbabwe has been growing wheat since the mid-1960s when UDI sanctions started cutting imports, but has never come close to self-sufficiency. Since Zimbabwean wheat has to be grown under irrigation it tends to be more expensive than imported wheat, with the costs of irrigation being higher than the transport costs of brining in imports.

However, the milling industry has always been able to meet demand from locally produced wheat and imported grain, except during the last period of the inflationary era when capacity loss was significant.

Because of the high costs of local production, Zimbabwean farmers need a lot of advance finance in addition to requiring some price support or import restrictions in

order to compete with imported grain.

So far finance has been scarce. The US$20 million winter wheat loan facility that was earlier proposed by Government failed to come through and banks that previously offered loans to wheat producers have stopped after failing to recover loans disbursed last year due to production constraints and the chaos that characterised the marketing of the crop last year.

Mr Musarara said local millers have excess stock of the product of up to four to six months cover of bread flour.

"What we are calling for duty review to reduce not ban flour imports to levels that our local millers can operate viably and keep our local wheat farming alive.

"Imports by their nature are supposed to complement local suppliers and not to substitute the local product," he said.

Last year, Zimbabwe harvested a mere 41 000 tonnes, which was significantly below the 450 000 tonnes required.

The major challenge is that the current low production of wheat will only result in increased wheat imports.

Mr Musarara said the local milling industry is well capacitated to meet the country's flour requirements.

"Our local industry milling capacity is 65 000 tonnes per month against national requirement of 25 000 tonnes per month.

"When duty on maize meal was reinstated the milling industry did not increase the prices of maize meal and never failed to supply," he said.

He added that in the event that local millers fail to cope with demand the duty can still be reviewed.

The GMAZ chairman said the unrestricted importing of wheat flour can only further distress the state of local wheat production and milling.

"Zimbabwe is using one of the strongest currencies in the world and as such it has attracted many flour suppliers around the world who are selling the product to us at cost or below cost just in order to get the dollar.

"Many of these suppliers are given export incentives by their respective governments of up to 20 percent and can therefore afford to export to Zimbabwe at a loss."

Copyright © 2012 The Herald. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.