New Zimbabwe.com

Zim’s $87m wheat debt attracting $400k monthly interest, says Millers boss

By Alois Vinga

ZIMBABWE is saddled with a total $87 million debt to wheat, rice, and salt foreign suppliers which is attracting $400 000 in monthly interests, Grain Millers Association of Zimbabwe chair, Tafadzwa Musarara has revealed.

The development is an indication bread shortages which are beginning to be experienced could persist.

Musarara told the media Thursday afternoon that the situation is so dire and can only be solved by currency reforms 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,” he said.

He noted that in order for the country to be sufficiently provided, $20 million is required to pay for wheat, rice and salt imports every month and hinted that the country does not have enough stocks.

“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 said.

The millers association boss observed 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 underscored that Russia, the world’s second largest wheat exporter and a major source market for Zimbabwe, has cut its export quota.

“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,” he said.

Musarara noted that GMAZ has offered to procure 120 000 metric tonnes of the local wheat and now and now ready to make prepayment.