HARARE: The Grain Millers Association has called on Government to suspend flour imports for the next six months to protect the local milling industry, the lobby group has said.
The local milling industry is facing decline in capacity utilisation as depreciation of regional currencies, particularly South African rand and Zambian kwacha against the dollar, has seen local bakers importing almost 100 percent of their flour requirements.
The rand, the currency of Africa’s second largest economy has depreciated by 26 percent from 10,5 to the dollar at the end of April this year to the current rate of 14,2.
As a result, the landed cost of imported flour has fallen from $32 per 50kg to $28. The local price is $32. GMA chairman Mr Tafadzwa Musarara said the millers have now become “very unprofitable,” and would be unable to finance wheat contract farming programmes.
Mr Musarara implored Government to, in an attempt to ensure local farmers paid a viable price and to protect local millers from imported cheap-wheat, “gazette a Statutory Instrument suspending the importation of wheat-made flour and maize meal for 6 months.” He said the protection of the millers would enable them to process and offload wheat, without increasing the price of local produced flour, and also ensuring local millers run at viable capacity utilisation levels.
“No flour shortages will be experienced because local millers have adequate milling capacity of 60 000 tonnes of wheat per month versus actual national consumption of 20 000 tonnes per month,” he said.
Mr Musarara said while there was a Memorandum of Understanding, which entailed that the baking industry procure 75 percent of their flour requirements from the local millers, the weakening of foreign currencies has made locally produced flour uncompetitive.
“It has now become a very unprofitable venture for millers to continue contracting local winter wheat, but lose market share to foreign flour products (as) local bakers have now resorted to procure 100 percent of their flour requirements from flour importers,” Mr Musarara said.
He said that the MoU has been weak on the enforcement of the agreed quotas as evidenced by drop of local flour sales from about 14 000 tonnes per month to 6 000 tonnes. He said their members were stuck with locally grown wheat and are unable to mill it.