Harare - The grain milling industry is currently saddled with $87m foreign liabilities to wheat, rice and salt foreign suppliers and the debt is accumulating to $400,000.00 monthly accruing interests, creating inflationary pressures towards product pricing, says Grain Millers Association of Zimbabwe chair, Tafadzwa Musarara.
The development is an indication that shortages and rise in prices of bread obtaining in the country could persist.
Earlier today Innscor issued a statement indicating that a loaf of bread which had been pegged at $1 will be $1.10 starting tomorrow (Saturday September 14).
Musarara said the entire African continent remains severely a net wheat importer and there is a seismistic change in generational dietary preference towards wheat products, and shifting from maize processed foods.
Given that African continent’s geography is poorly endowed to grow wheat, the deficit between consumption and production continues to widen, across Africa and Zimbabwe is not an exception.
In a statement on the association’s Facebook page Musarara said the situation can be addressed by addressing the currency situation in the country.
“The grain milling industry is currently saddled with a US$87 million foreign debt to wheat, rice and salt suppliers.
“This debt is accruing $400 000 monthly on interests, creating inflationary pressures towards product pricing.
“We wait with bated breath the full text of the proposed currency reform and hope that our outstanding nostro liabilities will be ring fenced against exchange losses.”
Musarara pointed out that $25 million is required to pay for wheat, rice and salt imports every month.
“The current national wheat stocks remain below national requirement with some mills having suspended wheat milling operations owing to unavailability of the product.
“However, bread flour supplies are being prioritised to the major bakeries that constitute 90 percent of market share and have national geographic spread.”
Musarara pointed out that global prices worsened by the adverse El Nino induced weather in the western world is negatively impacting on wheat exporting countries such as Germany and United States of America whose wheat supplies have been revised down.
He said Russia which is the world’s second largest wheat exporter and a major source market for Zimbabwe, has cut its export quota.
Musarara also said there is an accelerated wheat importation plan on the cards.
“GMAZ, Reserve Bank of Zimbabwe (RBZ) and the Agriculture Ministry have put in place comprehensive contingent measures for the expedited shipment of wheat into the country commencing Monday next week.
“We have already negotiated for the movement of 30 000 metric tonnes of wheat to Beira on an instalment pre-payment arrangement. The final payment on this shipment will be paid by tomorrow by RBZ and the shipment of the same to Zimbabwe will commence immediately thereafter both by rail and road. We aim to deploy 100 trucks to compliment rail.”
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