21 June 2018

Zimbabwe: RBZ Releases $20m for Wheat Imports

The Reserve Bank of Zimbabwe (RBZ) has released $20 million requested by millers to import wheat from Canada and Germany in an effort to supplement national wheat stocks.

The $20 million is part of the payment for the 200 000 tonnes of wheat which millers through their apex representative body, the Grain Millers Association of Zimbabwe (GMAZ), last month sourced from Canada and Germany.

The 200 000 tonnes will, however, come in batches until the country harvests winter wheat crop this summer.

The release of funds came after GMAZ requested $11 million from RBZ to pay for the first batch of the grain that docks at Beira port in Mozambique this week.

RBZ has done an advance payment to ensure wheat comes smoothly into the country.

The suppliers had demanded a full payment of the 30 000 tonnes of wheat, which was being shipped from Canada and threatened to divert it if GMAZ failed to pay once it lands at the port.

"Our logistics team is now working on how to transport the 30 000 tonnes of wheat which docks this week from Beira into the country whose arrival in Harare, we are expecting starting next week and we owe this to the central bank for their swift response," GMAZ's media and public relations manager Garikai Chaunza said.

"This is the first batch of the wheat deal which we concluded last month in Canada and we are going to receive the same quantum every month until the winter wheat harvesting season.

"Our national wheat stocks were fast depleting and we are left with grain that would take the nation up to June 26," said Mr Chaunza.

Previously, Zimbabwe relied on Russia for wheat and Thailand for rice, but now has a wide choice of suppliers to choose from due to improved relations between Zimbabwe and the Western countries.

Zimbabwe's millers are now able to import wheat from anywhere in the world, including America, Canada and Australia.

This will allow Zimbabwe to get the cheapest wheat and other grains in short supply.

This is likely to see the country experiencing more affordable prices.

However, the millers are facing challenges in accessing the foreign currency they require to pay for wheat imports, with backlogs dating back to December 2016.

Last year, Zimbabwe produced about 200 000 tonnes of wheat under Government's Command Agriculture programme.

This year Government planted around 67 000 hectares of wheat which is expected to produce over 250 000 tonnes of wheat.

This will reduce import bill by around $100 million.

More needs to be done to be wheat self-sufficient in the country agro economists argue.

The country needs at least 400 000 tonnes of wheat per year to meet its demand of about 950 000 loaves of bread per day.

Government statistics say annual production capacity stands at 200 000 metric tonnes, leaving a deficit of 200 000 tonnes.

Most African countries are net importers of wheat since the continent is not endowed with the right climate for its production.

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