Command Agriculture provides huge windfall to fertiliser, seed companies

FERTILISER and seed companies are expecting huge windfalls this year buoyed by demand from the grain import substitution programme, Command Agriculture, which is targeting about 350 000 hectares this season.

For the targeted hectarage, fertiliser companies estimate effective demand would be around 400 000 tonnes.

About 220 000 tonnes of this is expected to go towards Command Agriculture while the balance of 180 000 tonnes will go towards other agricultural initiatives.

The 220 000 tonnes that will go towards Command Agriculture will be split equally between NPK Granular /blends and top dressing.

Of the 180 000 tonnes that will go towards other agricultural interventions NPK Granular /blends will account for 130 000 tonnes with top dressing accounting for the balance.

Seed manufacturers are also earmarking a huge windfall as 70 percent of inputs are expected to be sourced locally.

Companies such as the Zimbabwe Stock Exchange-listed Seed Co Limited already anticipate a 20 percent increase in seed production on the back of anticipated improved demand for the 2017/ 18 selling season.

Seed Co group chief executive Morgan Nzwere recently said the Command Agriculture programme was a huge success in turning around maize production in the country.

In the year to March following its participation in the Command Agriculture programme last year, Seed Co recorded a profit after tax increase of 41 percent to $20,7 million from $14,6 million of the prior year.

Financing for the inputs has already been secured through Sakunda Holdings and other players that are coming on board.

Sakunda would finance 350 000 hectares with 290 000 hectares on maize and 60 000 hectares on soya beans.

The company is also financing 1,8 million families under the Presidential Input Scheme.

Addressing a Grain Millers Association of Zimbabwe stakeholders’ meeting last Friday, Chemplex Corporation Limited chief executive officer Tapuwa Mashingaidze said fertiliser companies have capacity to manufacture the fertilisers but require foreign currency investments to import raw materials.

“There is already existing capacity to manufacture these fertilisers and then there is additional investments being made by various players in blending capacity. We estimate there is at least now half a million tonnes worth of capacity to produce half a million tonnes per year of basal fertilisers perhaps even more because there is ongoing investments in blending units by various players. The only thing required is getting enough funding and enough Nostro dollars to import raw materials to utilise,” said Mr Mashingaidze.