By Thomas Mupfuka
PHI Commodities, an Innscor Africa owned company, says the volatility of the foreign currency interbank market is weakening contract wheat farmers as most growers are holding back due to lack of an agreed pre-planting price.
The company’s director Graham Murdoch on Friday said it was important for the government and millers to consider a pre-planting price based on the interbank market rate.
“As a result of the uncertainty and volatility of the currency market and the fact that the monetary policy statement (MPS) and the interbank market rate have not yet settled down, it is important that either the millers or government or both, look constructively at a pre-planting pricing announcement as soon as possible so that we can encourage farmers as some are holding back to their water,” he said.
“When we are talking about the purchasing price of wheat, before we hear about the pre-planting price it is important to stress out that our commitment as producers to the MPS and interbank market rate.
“It is important to stress out that the interbank rate can be a credible source of pricing and the sooner we will all know how to price to price our products going forward.”
Murdoch noted that private contract farmers were anticipating to plant over 15 000 hectares of the winter wheat crop this season and expected to harvest 90 000 tonnes in October and November of 2019.
“It is anticipated that the hectares should generate a minimum of 90 000 tonnes of good quality of harvest in October and November,” he said.
“We appreciate that this tonnage is below the national requirement. “Last year, the national crop was about 160 000 tonnes.
“We have been unable to secure foreign currency through the interbank market and we are now in a position of asking our suppliers to release inputs to us on the promise that we will be able to secure forex and pay for those inputs.”
Murdoch said all the inputs required for the 15 000 hectares were worth $12 million, while the savings made on the imported wheat would be around $36 million.
“So, it is important for government to support local production even just through currency,” he stressed.
Zimbabwe has been struggling with wheat shortages fir several months due to foreign currency shortages.