Milling companies suspend operations

HARARE - At least six milling companies have suspended operations following government’s failure to timeously pay for wheat currently held up in Mozambique, adversely affecting bread production in the country, Grain Millers Association of Zimbabwe (GMAZ) chairperson Tafadzwa Musarara has said.

The six companies are Victoria Foods, Uni Foods, Wheat Star, Power Foods, Falcon Foods and Oriental Milling.

Speaking to journalists yesterday, Musarara said the Reserve Bank of Zimbabwe (RBZ) had made an initial payment of $5 million to the wheat supplier Holbud Limited, leaving a balance of over $7 million, which he said is expected to be paid off today.

“I think there are about five or six that have suspended operations because of lack of product and as you may know that…Blue Ribbon is using Victoria equipment, Victoria Foods, which is currently under judicial management and had to slow down operations on the Victoria Foods plant because of the lack of product.

“However, what we have done is we have other millers with product, if the Reserve Bank pays the supplier tomorrow (today), the millers amongst themselves will be able to loan each other grain and then settle from the grain that will be coming in starting next week in order to ensure that the gap in the market is covered,” Musarara said.

Zimbabwe is currently experiencing bread shortages owing to the short supply of wheat, which is being held up in neighbouring Mozambique. Wheat is one of the products that are on the RBZ’s top priority list in terms of allocation of foreign currency, which is paid directly to the suppliers.

GMAZ recently warned of the looming shortages, following RBZ’s failure to pay the suppliers on time.

According to Musarara, the El Nino-induced weather conditions in the western world have impacted negatively on the major global wheat production in countries such as Germany and the United States of America.

He said this has resulted in supplies being revised downwards, which has increased the prices on the global market.

These changes might have an effect on the prices in Zimbabwe as well.

“Russia, arguably the world’s second largest wheat exporter ($5, 8 billion, 14, 8 percent wheat exports) and a major source market for Zimbabwe, has cut its exports quota. The unfolding geo-politics around trade tariff wars are not making the situation any better,” he said.

He further said the entire African continent remains a net importer of wheat, as more people are now consuming wheat products and Zimbabwe is not an exception, as its wheat cannot alone be used in bread making.

He said local wheat is only used for biscuit and self-raising flour production.

“We require $13 million every month for wheat, the whole country, so that we will be able to produce bread flour, self-raising flour,” Musarara said.

He said, in as far as the situation needs immediate intervention such that they are planning to deploy 100 trucks to complement rail transport, there was no way the country will be able to bring in the whole of over 30 000 metric tonnes into the country at once.

“It’s a process of between 14 to 21 days, but as the stocks come in, because normally NRZ (National Railways of Zimbabwe) brings about 1 400 tonnes a day and daily consumption for bread only is 700 tonnes and we probably need 1 200 tonnes,” he said.

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