PRINTABLE VERSION   EMAIL TO A FRIEND   RSS FEEDS 12:56 UK, 23rd Jul 2014, by Agrimoney.com
Zimbabwe's wheat imports to hit record high

Political uncertainty, and a dearth of electricity, are to hamper Zimbabwe's drive to recover prominence in grains production despite healthy rains, with its wheat imports set to hit a record high.

Zimbabwe's crop prospects were improved by a "favourable and long" rainy season, which brought decent rainfall even to traditionally-dry southern areas, US Department of Agriculture staff in South Africa said.

Indeed, for most corn-producing areas, it was the "best and longest production season since 1980", when Zimbabwe produced 2.8m tonnes of the grain, supporting exports of 300,000 tonnes that season and nearly 500,000 tonnes the next year.

Nonetheless, corn output is expected for 2014-15 at 1.3m tonnes, up 500,000 tonnes year on year, but well below historic highs, besides the 1.7m tonnes needed to meet domestic needs.

'Late payment of debts'

The average corn yield looks like averaging 1 tonnes per hectare, well below the potential 6 tonnes per hectare offered by the hybrid seed used by Zimbabwe farmers, with the shortfall blamed on the dent to fertilizer availability from a government reluctance to pay bills for state nutrient programmes.

 "Fertilizer companies are facing liquidity constraints as banks are not prepared to extend credit to the companies because of their exposure to the government," the USDA staff said, noting the government's "late payment of debts".

"Although fertilizer demand is high, manufacturers face problems of inadequate funding for raw materials and operations, low capacity utilization, and antiquated technologies with high inefficiencies."

Record imports

For wheat, Zimbabwean production will remain at 25,000 tonnes, a fraction of levels above 300,000 tonnes recorded as late as 2001, despite a drive by the government announced earlier this year to revive output to 29,000 tonnes this year.

The crop, planted between April and May, well after the close of the rainy season, requires irrigation which faces challenges of an "erratic" electricity supply, high water costs and an unwillingness to invest in irrigation infrastructure, for fear of farms falling foul of Zimbabwe's land reallocation programmes.

Farmers are expected to cut wheat sowings by 2,000 hectares to 8,000 hectares this year, offsetting potential for yield improvement, the country will need record imports, of 275,000 tonnes, to meet domestic demand, the USDA staff said.

Exporter to importer

Zimbabwe's reliance on imports, especially of corn, represents a sharp turnaround from the early years of the regime of Robert Mugabe, who has led the country, either as prime minister or president, since 1980.

The country, once termed the "breadbasket of southern Africa", was rarely a net importer of corn – the basis of local staple mealie meal as well as for livestock feed - until the turn of the century, when its  production tailed off sharply, viewed as a result of the ousting of commercial farmers.

The government has attempted to encourage production through offering a guaranteed price of $390 a tonne ($9.90 a bushel) for white corn, the basis of corn flour for human consumption.

However, the state-run Grain Marketing Board, "facing financial constraints… is now viewed by growers as a buyer of last resort, because of the long waiting period before payments are made for delivered grain", the USDA staff said.

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