Pro­duc­ers in panic mode:

rush to off­load stock­piled goods

The Sunday Mail (Zimbabwe) - - FRONT PAGE - Africa Moyo Se­nior Busi­ness Re­porter

SOME man­u­fac­tur­ers of ba­sic com­modi­ties are re­port­edly in panic mode, amid in­di­ca­tions they are now des­per­ate to im­me­di­ately off-load the prod­ucts they have been al­legedly stock­pil­ing in the last few weeks.

The move comes as man­u­fac­tur­ers seek to main­tain a stran­gle­hold on the lo­cal mar­ket fol­low­ing Govern­ment’s de­ci­sion to temporarily sus­pend Statu­tory In­stru­ment 122 of 2017 (for­merly SI 64 of 2016) last Tues­day to al­low su­per­mar­kets to re­stock.

A so­cial me­dia-in­duced shop­ping spree had seen ba­sic com­modi­ties be­ing wiped out of shops as con­sumers feared for wide­spread short­ages of ba­sic goods.

The sit­u­a­tion was wors­ened by scep­ti­cal man­u­fac­tur­ers who re­port­edly held on to prod­ucts, with some re­port­edly di­vert­ing the goods to for­eign mar­kets, de­spite ben­e­fit­ing from Govern­ment sub­si­dies, in­clud­ing for­eign cur­rency.

The sus­pen­sion of SI 122 of 2017 is un­der­stood to have rat­tled some man­u­fac­tur­ers, who were hold­ing the coun­try to ran­som, and are now keen to sup­ply their prod­ucts be­fore im­ported goods take over su­per­mar­ket shelves.

An of­fi­cial from a cook­ing oil firm, name with­held, said: “We have been pro­duc­ing cook­ing oil all along but our bosses had said we should not de­liver it lo­cally. Some of the cook­ing oil was be­ing ex­ported to Mozam­bique de­spite short­ages on the lo­cal mar­ket.”

While most for­mal su­per­mar­kets have been struggling to sat­isfy the lo­cal mar­ket, the goods have been read­ily avail­able in in­for­mal shops where they are sold in US dol­lars or bond notes at thrice the for­mal price.

The of­fi­cial from the cook­ing oil firm went on to say the sus­pen­sion of SI 122 of 2017 came as a shock to man­age­ment, hence the hur­ried de­ci­sion to start de­liv­er­ing the prod­uct to en­sure that “im­ported goods do not steal our clients”.

Ba­sic goods such as cook­ing oil, bath soap and sugar re­turned to some su­per­mar­ket shelves on Wed­nes­day last week.

Top re­tail­ers such as Pick ‘n Pay, OK Zim­babwe and Food World, are sell­ing cook­ing oil at an av­er­age price of US$3,90. Geisha soap is re­tail­ing at US$1,15. How­ever, some re­tail­ers are de­mand­ing that each cus­tomer must first buy goods worth US$10 or US$15 in or­der to ‘qual­ify’ to buy cook­ing oil.

Last week, Con­fed­er­a­tion of Zim­babwe Re­tail­ers (CZR) pres­i­dent Mr Den­ford Mu­tashu con­firmed that some sup­pli­ers are pan­ick­ing fol­low­ing the sus­pen­sion of SI 122. Mr Mu­tashu said the pan­icky sup­pli­ers have im­me­di­ately made ar­range­ments to re­sume sup­plies stopped on Oc­to­ber 2nd.

“Sup­pli­ers were hold­ing re­tail­ers at ran­som by re­fus­ing to re­lease prod­ucts to the mar­ket so they could di­vert it to some black mar­ket car­tels, and con­sumers would blame the short­ages on re­tail­ers,” said Mr Mu­tashu.

“But now we can buy on our own and en­sure there is prod­uct avail­abil­ity for con­sumers. We will al­ways pri­ori­tise lo­cal prod­ucts and will only im­port to aug­ment lo­cal sup­plies to avoid short­ages.

“The sit­u­a­tion had gone ter­ri­ble but we are op­ti­mistic this should ben­e­fit con­sumers as well as bring price stability. Peo­ple can­not get into the fes­tive sea­son with­out ba­sics.”

CZR had been lob­by­ing Govern­ment to sus­pend SI 122 to al­low re­tail­ers to re­stock.

Cook­ing oil mak­ers speak

How­ever, Oil Ex­pressers As­so­ci­a­tion of Zim­babwe chair­man, Mr Bu­sisa Moyo told The Sun­day Mail Busi­ness last week that man­u­fac­tur­ers were not hid­ing prod­ucts, although he con­ceded that some were en­gag­ing in rent-seek­ing be­hav­iour.

“This is com­pletely false, (that the short­ages are a re­sult of man­u­fac­tur­ers hold­ing on to their prod­ucts). How­ever, there is a lot of rent-seek­ing be­hav­iour on our cook­ing oil prod­ucts by small re­tail­ers, hoard­ers, ar­bi­trageurs and rent-seek­ers,” said Mr Moyo.

“We have main­tained prices thus far but the dis­tor­tion and fake news on­slaught has reached epic pro­por­tions. On cook­ing oil, we have main­tained sup­plies based on what we have been of­fered by the RBZ (Re­serve Bank of Zim­babwe) and await the Afrex­im­bank fa­cil­ity, which will be con­cluded by month end.”

Mr Moyo, who is also CEO for cook­ing oil firm, United Re­finer­ies Lim­ited (URL), said fol­low­ing the pro­vi­sion of funds by the RBZ, they were able to pro­duce cook­ing oil and de­liv­ered 35 000 units into Bu­l­awayo last Wed­nes­day.

He added that bulk oil was also sup­plied to cus­tomers who fry and make var­i­ous prod­ucts. On Thurs­day, URL de­liv­ered a fur­ther 20 000 units at its nor­mal prices. Con­fed­er­a­tion of Zim­babwe In­dus­tries (CZI) pres­i­dent Mr Sife­lani Ja­bangwe said some man­u­fac­tur­ers could have been hold­ing on to their prod­ucts “to see where the prices would go fol­low­ing a spike in ex­change rates”.

But Mr Ja­bangwe said sup­plies would soon pick-up since man­u­fac­tur­ers got for­eign cur­rency al­lo­ca­tions from the RBZ be­gin­ning last Mon­day.

“Re­mem­ber the (RBZ) Gov­er­nor (Dr John Man­gudya) was away so we held a meet­ing with him last week (a fort­night ago) and some pro­duc­ers started get­ting for­eign cur­rency al­lo­ca­tions on Mon­day.

“The real rea­son for the short­ages has to do with for­eign cur­rency. The sit­u­a­tion wors­ened af­ter Govern­ment an­nounced fis­cal and mone­tary mea­sures and the mar­ket went into swings and moods.

Said Mr Ja­bangwe: “Com­pa­nies are ac­tu­ally be­hind Govern­ment and I can tell you that some are now ow­ing sup­pli­ers any­thing be­tween US$2 mil­lion and US$50 mil­lion be­cause through­out the year, the RBZ kept say­ing ‘keep pro­duc­ing, we will pay you’.”

He said the for­eign cur­rency chal­lenges ap­pear to be cycli­cal as the short­ages and high prices were also ex­pe­ri­enced last year in Septem­ber.

For­eign cur­rency lev­els usu­ally dip at the end of the to­bacco sell­ing sea­son.

Dr John Man­gudya

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