Zimbabwe’s grain millers to import 500,000 tonnes of maize from South America
HARARE – The Grain Millers Association of Zimbabwe (GMAZ) says it will import half a million tonnes of maize – roughly half of its requirements for commercial milling, from South America this year to mitigate glaring production gaps.
The association paradoxically still maintained that the landlocked southern African country was adequately stocked for maize, its staple grain. On a monthly basis the local milling industry requires about 83,000 tonnes of maize.
GMAZ chairman Tafadzwa Musarara said the grain reserves had depleted given that given that they had to continue to draw down without welfare allocations for vulnerable groups. The association has since engaged Reserve Bank of Zimbabwe on payment issues – with at least US$100 million required.
“We are aiming to get 500,000 tonnes of maize and we want to do it now because they will be a rush for that maize by some African countries that have been hit by this drought,” said Musarara, adding that preparations were under away.
It costs an average of US$250 to import a tonne of maize from South America (Brazil and Argentina).
“I think in eastern and southern African countries there is no country which has excess to do an intra-regional trade hence we have got to go to South America and the sooner the better for us to get maize before the prices goes up, book the ports and all the logistics in place. If you look at Beira it is going to be used by Zambia, Malawi and Zimbabwe so the earlier the better.”
The southern African nation consumes approximately 120,000 metric tonnes of maize per month.
Commenting on the ongoing contract farming scheme targeted at increasing the country’s wheat output and cutting back the country’s reliance on imports for the commodity, Musarara anticipated output of about 100,000 – 150,000 tonnes. He admitted that the association had been failing to supply adequate flour to meet national demand, largely due to a low supply imports of imported wheat, attributed to acute shortages of foreign currency.
“There is a limit to what we can do, the demand is 400 000 tonnes and increasing given the demographic changes. People are eating more bread and we are now getting into high peak period – the winter season when people want more tea and bread,” he said.
Wheat prices have been set at ZWL$1 089.69 per tonne from $500 again as a way of bringing it closer to import parity. Imported wheat lands in Zimbabwe at between US$400-$450.
Meanwhile, GMAZ and Confederation of Zimbabwe Retailers (CZR) signed a Memorandum of Understanding on the unveiling of industry self-regulation and basic commodities (maize meal and flour related products) price monitoring initiative. Musarara said the country was currently under siege regarding price increases, especially on staple foods, adding that was because of a number of cost pressures.
Previously, GMAZ published maximum recommended price, which it feels were not enough without monitoring these prices and ensuring that there is compliance.
“We have instances whereby a shop realises it might be the only one with stocks of rice and the stocks are flying off the shelve decide to just to mark it up, we have met our colleagues in the retail sector and decided to come up with a self-regulatory mechanisms – this is not price control,” added the GMAZ leader.
GMAZ and CZR have gone a step further to introspect and come up with a committee to look at the enforcement or monitoring prices nationwide.
“We will deploy 180 personal country wide who are going to move from one retail to the other checking that the prices that we have recommended prices are indeed adhered to.”
On the maize meal, they agreed that the retailer shall mark up 12% margin – 10% margin + 2% intermediary tax arising from transactions. Self-raising flour a maximum of 18% + 2% tax and Rice by the same. Salt shall be at 10% markup + 2% tax.
“Now the monitoring team will be going to shops to ensure that the maximum prices are observed where noncompliance is observed we shall ask the respective retailer to rectify and when we are satisfied that the retailer is not keen to comply within the margins we will withdraw supplies which means none of the milling companies will supply that entity until such a time we reach an understanding,” Musarara said.
CZR president Denford Mutashu said the intention was to promote self-regulation by the private sector without having to meet serious intervention from authorities.
“So it is basic that the agreement is reached quite a number of discussions quite reasonable markups in terms of viability and affordability. We certainly call upon the sector to ensure that they stick to the agreed markups and ensure that the consumers are not shortchanged at any particular time,” said Mutashu.
“It is also agreed that the millers will channel production through the formal retail and wholesale sector to avoid noncompliance.”
The two parties involved said the indicated margins were reasonable to sustain any retail business. The mentioned products in terms of retail language are called loss leaders – don’t expect much profit but a small margins which gives good volumes.