Agriculture is vitally important to Zimbabwe’s economy, but it struggles with challenges created by the country’s wider economic problems and has been hit hard by southern Africa’s drought. It means a traditional grain importer is an even bigger importer now.
The International Grains Council (IGC) projects Zimbabwe’s 2016-17 maize (corn) production at 400,000 tonnes, down from 700,000 the year before. It forecasts the country’s total grains imports at 1.1 million tonnes in 2016-17
The USDA attaché in Pretoria explained the drop. “Zimbabwe experienced one of its driest seasons since the 1992-93 season, due to a strong El-Niño-induced drought,” an annual report on the grains sector in Zimbabwe said. “As a result, corn production in the 2016-17 market year (MY) declined by an estimated 43%.”
The report sees imports higher than the IGC’s forecast. “Zimbabwe will have to import an estimated 1.4 million tonnes of corn in the 2016-17 MY to meet the production shortfall,” it said.
The attaché explained that wheat production is on a declining trend.
“Prospects for wheat production in Zimbabwe are also gloomy and production in the 2016-17 MY is estimated to reach only about 16,000 tonnes. Hence, Zimbabwe’s wheat imports are forecast to reach about 280,000 tonnes in 2016-17 MY.”
Explaining why the maize crop is down so sharply, the attaché said, “The most affected areas by the drought were parts of the Midlands, Masvingo, the southern parts of Manicaland provinces, as well as the provinces of Matabeleland North and South. These areas had high rates of corn crop failure of more than 65%.
“Consequently, effective from Feb. 3, 2016, the Zimbabwe government declared the 2015-16 farming season a ‘state of disaster,’” the report said. “The 2016-17 MY El-Niño-induced drought is the second consecutive dry season in Zimbabwe after the drought of the 2015-16 MY. Corn production in the 2015-16 MY declined by 52% to 700,000 tonnes, due to last year’s drought, that was particularly severe in the south of the country.”
Agricultural inputs (corn seed, fertilizers and agro-chemicals) were abundantly available on the market, the attaché said.
“However, only about 40% of the 360,000 tonnes of locally produced fertilizer was taken up because of the low corn area planted,” it said.
The Zimbabwean government policy on Genetically Engineered (GE) corn has not changed, the attaché’s annual report said. Cultivation of GE corn is prohibited, but GE corn for consumption can be imported as long it is milled into meal under government supervision.
The attaché explained that maize imports into Zimbabwe have come from its neighbors, South Africa, Zambia and Malawi, but that they’ve also had reduced harvests because of the same weather problem and don’t have the maize to export.
“The Zimbabwe government and the private sector are targeting corn imports mainly from Mexico, the United States, Ukraine, Brazil and Argentina, of approximately 1.4 million tonnes,” the report said. “The Zimbabwean government is expected to import about 700,000 tonnes, while the private sector will import the balance. Zimbabwe will import both GE and non-GE corn for human consumption.”
This creates a logistical headache, the attaché said. “The unprecedented level of grain imports by Zimbabwe and other southern African countries of an estimated record of 6.2 million tonnes of corn and an additional 5 million tonnes of other grains will put pressure on the ports,” the attaché said. “Zimbabwe, in addition to the South African ports, plans to use the Mozambican ports of Maputo and Beira.”||| Next Page |||
The attaché said several factors have led to the drop in wheat production. “Generally farmer confidence in wheat production is low due to historical problems with power outages during the winter production period,” the report said. “Government, through the Grain Marketing Board, is offering $500 per tonne for wheat to incentivize farmers to grow the crop.”
Wheat is widely consumed by over 10 million people in Zimbabwe, about 77% of the country’s population, predominantly as bread, it said.
“Daily bread is currently estimated at about 850,000 loaves,” it said. “Millers estimate the country’s monthly wheat consumption at about 25,000 tonnes.”
“Traditionally the milling industry has imported about one-third of its requirements for mixing with the local flour, as the local wheat grain is soft and has poor baking quality,” the attaché said. “Imported wheat currently makes up more than 90% of national wheat requirements.”
In October, the Herald newspaper quoted Grain Millers Association of Zimbabwe (GMAZ) Chairman Tafadzwa Musarara as saying that milling capacity is more than adequate. Musarara put monthly capacity at 60,000 tonnes, compared with actual consumption of 20,000.
Marc Cerrie-Wilson, acting director of the Commercial Farmers Union of Zimbabwe, explained that wheat grown in the country had to compete with rain-fed wheat from origins like the Baltic.
“The varieties of wheat that grow well in Zimbabwe are soft varieties, so the millers have always had to import hard varieties to grist or mix with soft wheat varieties to make bread,” he told World Grain. “Essentially we have always been a net importer of wheat.”
However, the crop is important for Zimbabwean farmers to grow during the winter months.
“Local production means you are not wasting foreign currency importing, particularly a low-value, high-bulk thing like wheat,” he said. “Secondly, it is nice for farmers, particularly commercial farmers, to have two crops which they can grow in a year because that carries their overheads during the winter months.”
“The major challenge with wheat in the last few years has been a shortage of electricity,” he said. “Power cuts occur at critical times during the growth of the wheat. This can be disastrous for the yield. The yield is critical to make the commodity work, to make business sense for the farmer.”
“It costs about $2,200 per hectare to produce wheat in Zimbabwe which is quite high by world standards I would imagine,” he said.
Because the crop is irrigated, the drought doesn’t affect it directly, although it could potentially by reducing the available stored water. In practice, the slowdown in Zimbabwean farming has meant there is generally no shortage of surface water for farmers to use.
He said the milling sector is dominated by one company. “The major miller, which probably accounts for about 80% of the milled flour, and bear in mind that the local milling industry must compete with imports of flour from South Africa and so on, is a company called National Mills,” he said. “Then latterly there has been investment into Blue Ribbon Industries.”
In its annual report for 2015, National Mills said it had invested $2.6 million in its Harare and Bulawayo flour mills. Its flour milling division increased volumes by 11.2% during the year.
“This marked the first year of an intensive three-year program to refurbish both the Harare and Bulawayo flour mills to international standards,” it said. “The program is on track and progressing well, with capital expenditures of $4.7 million planned for the coming financial year. Operating performance of the flour mills continues to improve significantly on the back of this investment.”
According to a report carried by Forbes at the end of June, Tanzanian multi-millionaire Said Salim Bakhresa was set to spend $30 million in acquiring a controlling stake in flour miller Blue Ribbon Industries.
A report published by the University of Pretoria in 2010 listed 38 flour millers (and said there were more than 486 maize millers), but Cerrie-Wilson expected to see many of them fail. “I think the smaller chaps will not survive,” he said.
“It is difficult for our farmers to compete with the import parity price of wheat at the moment, which is around about $380 to $400 a tonne,” he said. “Our farmers will survive at $400 a tonne, but remember at $2,200 (costs) a hectare, it means that your break even yield is five-and-a-half tonnes. To make money on it you need seven tonnes.
“Historically this country has the capacity to mill our entire national requirement. The national requirement for maize meal for human consumption is around 1.4 million tonnes per year. For wheat, we need about 300,000 to 350,000 tonnes a year.”