5 December 2018

Zimbabwe: Wheat Shortage Fears Allayed

Zimbabwe has enough stocks of wheat to cover the next four months, Information, Publicity and Broadcasting Services Acting Minister Mangaliso Ndlovu said yesterday. Responding to questions from journalists after yesterday's Cabinet meeting, Minister Ndlovu said Zimbabwe's wheat supply was stable.

"The country has enough wheat reserves to cover the next four months," he said.

"There was an issue that needed to be resolved which had to do with pricing from the Grain Marketing Board to the millers and that was effectively dealt with today and we hope GMB will be given the directions. There is no need to look for foreign currency at the moment when it comes to procuring wheat because we have enough wheat. They will be producing wheat from GMB."

This comes as the Grain Millers' Association of Zimbabwe (GMAZ) yesterday said Zimbabwe's wheat supply situation has stabilised over the past few months as the Reserve Bank of Zimbabwe has been consistent in foreign currency allocations to the sector.

GMAZ chairman Mr Tafadzwa Musarara said a new shipment of wheat was expected in the country next week from Lithuania to buttress local supplies for the festive season.

"For the past six months or so, despite delays, we just want to acknowledge that the Reserve Bank of Zimbabwe is indeed making payments towards the importation of our wheat. We have come up with an arrangement to aggregate our requirements, buy as one and then share according to the amount each member would have paid," said Musarara.

"The market remains stable, the supply situation remains stable. Everyone has benefited from the Command Wheat and the arrangement that we have in getting wheat as an association does not bar any of us to make separate or independent purchasing arrangements, but everyone who is in the milling industry has benefited from the wheat that we have imported as GMAZ.

"We are expecting a ship that is arriving next week. We had a ship that docked last month and all milling companies have got wheat from that ship which we bought using bond and RTGS. All milling companies have got that wheat as well as last year's wheat."

Official figures from the RBZ show that the country uses around $45 million per quarter on wheat imports.

Added Mr Musarara: "We have stabilised the bread supply . . . There is no need for panic buying, customers should just buy their usual quantities. We are ready to meet the high demand that comes with the festive season.

"Each shipment carries around 30 000 tonnes and our consumption is between 38 000 and 40 000 tonnes. There is 130 000 tonnes of wheat just recently harvested so we can't talk of a shortage.

Mr Musarara's statements come amid reports that one of the country's largest millers, National Foods, was threatening to close its wheat processing plants unless the central bank provides foreign currency that the company needs to pay suppliers.

Mr Musarara said the association does not "micro-manage any single business".

"As I indicated earlier, individual members are free to engage any supplier outside the two arrangements that we have in place as an association, that is, the GMAZ arrangement to buy local wheat and the other arrangement to import wheat.

"It's only proper for them (National Foods) to comment on their own operations. We are an association, but individual members can make individual decisions; they are not bound by the association," he said.

National Foods aside, the GMAZ has an installed capacity to mill 60 000 tonnes of flour a month. Zimbabwe requires just under 20 000 tonnes of flour a month for bread.

National Foods chief executive Mike Lashbrook, however, clarified to the Herald Business that the company is not shutting down operations.

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