Milling industry allays supply gap fears

The local milling industry says it is geared to meet local demand for bread and flour-related products in the country, allaying fears of supply gaps following an increase in international wheat prices and a boom in global demand.

IN RECENT days, international wheat prices increased by 9 percent, a situation local economists say will put pressure on Zimbabwe’s foreign exchange requirements and on consumer spending. International wheat suppliers increased the cost of the cereal by between $35 and $45 per tonne on the back of an increase in transport costs, increased demand as climate change effects have also strained production.

Grain Millers Association of Zimbabwe (GMAZ) media and public relations manager Garikai Chaunza, said the industry was, however, ready to meet local demand, due to Government’s initiatives of ensuring food security.

Interventions by the Cabinet Committee Chairperson on Food Security and Nutrition, Vice President Constantino Chiwenga, have also seen an increase in wheat import supply, resulting in flour production and supply levels increasing to meet national demand.

This has also been made possible by the intervention made by the Reserve Bank of Zimbabwe where it has assured a monthly disbursement of foreign currency for wheat imports by millers so that national stocks remain replenished.

“The consumption of bread and flour related products is at its peak owing to a number of factors chief among them is the chilling weather conditions forcing many to resort to drinking tea, the rising farming community’s income from tobacco, maize and other agriculture related produce sales. The milling industry is, however, geared to meeting the rising flour demand,” said Mr Chaunza.

Local millers have also offered to buy in advance all the anticipated 200 000 tonnes of wheat grown under the Command Agriculture 2018 winter wheat season, which should further boost activity flour production industry and across value chains.

Zimbabwe needs at least 400 000 tonnes of wheat per year to meet its demand of about 950 000 loaves of bread per day.

On a monthly basis, wheat consumption is estimated at 38 000 tonnes for the production of bread, confectioneries, biscuits and other flour related products.

Local millers are currently producing 22 million kgs of baker’s flour per month against an installed monthly production capacity of 43 million kgs of the same.

A recent study by the National Bakers Association of Zimbabwe (NBAS), shows that the country’s three largest bakers namely Bakers Inn, Lobels and Proton constitute 95 percent of the local market when combined with in-store bakeries.

One of the country’s largest milling companies, Blue Ribbon Foods has procured and installed a milling plant which comes with an additional milling capacity of 9 000 tonnes per month which should further enhance production.

Blue Ribbon general manager Yusuf Kamau, said the plant to commence operations this month, would result in a 12,3 percent increase in national installed wheat milling capacity.

According to the Food and Agriculture Organisation (FAO) global cereal production for 2017 was around 2, 64 billion tonnes, up from 2,61 billion tonnes recorded in the prior comparable period. Wheat production is expected to decline by 0,3 percent year on year to 757 million tonnes, from 759,8 million tonnes in 2016/17 year with the projected decline stemming from forecast reductions in the EU and Russian Federation, reflecting anticipated fall in yields from the highs of 2017.

For Zimbabwe, wheat production in 2017 was estimated at 20 000 tonnes. The country’s wheat production experienced a steep decline when output halved to 150 000 tonnes before further declining to about 38 000 metric tonnes during the hyperinflation period of 2008/ 9.

Further declines were experienced in the following years and these were attributed to the reduction in the area planted from 11 600 hectares in 2012, to around 8 500 hectares in 2013, as farmers switched to cash crops such as tobacco, whose profits per hectare are much higher.