HARARE: Zimbabwe’s food processing sector is proposing to buy wheat from local farmers at $410 per tonne from the current $340. The sector is also lobbying the government to suspend wheat imports and maize meal for six months to protect millers from cheap imports.
The proposals are contained in a letter to the Minister of Agriculture, Mechanisation and Irrigation Development, Joseph Made, from the Grain Millers’ Association of Zimbabwe. Millers will give farmers a premium price to mop up about 60,000 tonnes of wheat available in the country but will maintain prices of flour products at current levels.
The Zimbabwe Commercial Farmers’ Union (ZCFU) has rejected the proposed purchase price demanding an upward review to ensure “profitability” of farmers. “We’re not happy about the proposed price for the top grade wheat pegged at $410 per tonne as it isn’t viable. It can be viable for farmers if the price is pegged at least $500 per tonne,” ZCFU president Wonder Chabikwa said. He, however, said the broader framework by millers was satisfactory as it seeks to protect local farmers from cheap wheat imports.
“The proposed framework is okay as it ensures that the farmers are protected from cheap imports,” said adding the proposed six months time frame for the suspension of wheat and maize imports would allow local absorption of wheat by millers.
In the letter, GMAZ chairman, Tafadzwa Musarara, said in light of the surging production costs of local wheat farming, the milling industry is alive to the fact that the currently obtaining wheat FOB import parity prices are not viable and will ultimately dissuade future wheat farming in Zimbabwe.
“We, therefore, propose that local wheat be purchased at a premium of up to $50 per tonne in the 2015 winter wheat marketing season. This will mean that the top grade local wheat will be purchased at a price of $410 per tonne,” said Musarara.
The millers further propose that the prices of bakers’ flour and pre-packed flour be held at current levels so that the price of bread will not be increased. But GMAZ also wants the government to play ball to protect the millers by barring wheat flour imports.
“We, therefore, propose that the Hon Minister of Agriculture, Mechanisation and Irrigation Development, in attempt to ensure local farmers are paid a viable price and to protect local millers from imported cheap wheat flour which can then undercut local millers, gazette a Statutory Instrument suspending the importation of wheat flour and maize meal for a six-month period,” said Musarara.
“Local wheat is normally held for up to six months by millers as farmers do not have storage facilities of their own. Protection of the local millers will enable local millers to process and offload the wheat, without increasing the price of locally produced flour and also ensures local millers run at viable capacity utilisation levels,” he said.
Musarara said no flour shortages would be experienced because local millers have adequate milling capacity of 60,000 tonnes of wheat per month versus actual national consumption of 20,000 tonnes per month. He said millers do not want to buy wheat at import parity prices which hover around $340 per tonne, which prices are too low to keep farmers in business.
Local farmers are facing dwindling production, a direct result of the power outages the country is facing coupled with high production costs. Farmers also face stiff competition from cheap wheat imports coming from the region.
