Consumers must brace for a further 20% increase in the price of bread and maize meal in January 2011 because Zimbabwe’s source of grain cannot meet local demand, insiders in the milling industry revealed on Monday.
Industry sources said Zimbabwe’s major source of maize, Zambia, was failing to meet Zimbabwe’s requirements of the staple grain.
The situation has been compounded by the government’s refusal to allow the growing and importation of genetically modified (GMO) grain to augment the country’s requirements.
“GMO-free maize coming from Zambia has depleted and can no longer sustain our local demand,” said one top industry player.
“South Africa has plenty of GMO-positive maize but very few quantities of GMO-free maize that can meet Zimbabwe’s GMO intolerance levels and thus creating a supply crisis.”
The sources said the firming of the rand and shortage of GMO-free maize in the region would drive the prices of flour and maize meal up
“Millers are now forced to buy from the Grain Marketing Board (GMB) which is selling at $320 per tonne, a price that is higher than the cost of roller meal produced from imported maize. The landed cost of the GMB maize at a respective milling plant is $350 per tonne. So it means that the government, through GMB, will be chiefly responsible for the price increase of maize meal,” said one source.
The sources said the industry was actively pushing for a price hike on maize meal but the Grain Millers’ Association, led by its chairman Tafadzwa Musarara, blocked the increases fearing a backlash because of the election mood engulfing the country.
“Some millers were pushing for a price increase before Christmas but Musarara vetoed the idea fearing a government backlash as the country is now gripped in election fever preferring to wait until mid-January,” said the source.
Despite poor harvests, Zimbabwe remains opposed to growing and importing of GMO-positive grain into the country. It’s estimated that only 10 000 metric tonnes of wheat was harvested in the last winter season against a national annual consumption of 500 000 metric tonnes.
This leaves the country a net wheat importer, says an industry player.
The milling industry’s woes continue to mount as duty-free imports of maize meal and flour have adversely affected several local companies.
The Grain Millers’ Association say up to 280 millers have closed down countrywide due to viability problems leaving less than 20 millers operational but at very low capacity utilisation.
The poor payment record of local bakers for the local flour they buy has driven millers fast to bankruptcy.
Recently, National Foods, the country’s largest miller, announced that it had put nine of its 14 factories under care and maintenance and introduced voluntary retrenchments.
Other big millers have been failing to meet their monthly salary payment obligations. Many other small millers have relocated to growth points in order to save on operational costs.
Efforts to get comment from Grain Millers’ Association chairman Musarara, were fruitless as his mobile phone went unanswered.