ZIMBABWE – Zimbabwe has asked grain millers to venture into wheat farming as remedy to enhance raw materials supply for their milling operations, given forex currency shortage challenges in the country.
According to the IOL Business, Zimbabwe’s cabinet has agreed to finance a decision posited by Finance Minister Mthuli Ncube to have wheat millers venture into wheat farming and fund their own raw material for flour milling.
Shortage of wheat for milling has threatened most of the milling companies, with National Foods, the country’s largest food and flour producer indicating plans to shut down its flour mills in Harare and Bulawayo.
“The cabinet agreed on measures to boost local wheat production as follows: that grain millers and bakers be facilitated to venture into wheat production for their specific needs,” said Ncube.
The government of Zambia has also pledged to ensure that appropriate schemes be instituted to insure the wheat crop so as to encourage farmers to venture into wheat production.
Ncube has recommended grain millers to use contract farming arrangements as a way of ensuring reliable and consistent supply of the vital commodity used in making of bread and other products.
Other Zimbabwean manufacturers that already use contract farming include Anheuser-Busch InBev associate brewer in Zimbabwe, Delta Corporation, as well as British American Tobacco Zimbabwe, among others.
Shortage of the grain
National Foods had announced that it was closing down some of its wheat processing mills after failing to source wheat stocks over failure to pay foreign suppliers.
The food company had written to its customers indicating the intention to close down its flour processing factories in Harare and Bulawayo.
The company, jointly owned by Tiger Brands and Innscor Africa is reported to have been unable to pay its suppliers in a country that has long-battled forex, fuel and medical supply shortages.
Zimbabwe Industry Minister Mangaliso Ndlovu said the closure of National Foods’ mills had been averted after intervention by the central bank to clear the company’s arrears.
“What I can say about National Foods is that we had discussions last night with them and the Reserve Bank of Zimbabwe, and the issues that they raised were all resolved and the agreement was that they will not be closing as they had indicated,” he said in a statement.
Reports showed that in addition to low local stocks, supplies of imported wheat were inadequate to meet demand in a market where bread is a staple.
Making the matter worse is the coming festive season which has always been deemed the peak season for demand of flour.
Shortages in foreign exchange have left companies in fuel, wheat, grains and medicines queue for limited supplies, mainly from imports.
It has also led to increase in bread prices, with some regions recording shortages.