Bread shortage looms in Zim

production dropping by more than 50 percent.
The bakeries are baking 600 000 loaves of bread against a daily national requirement of 1,6 million, it has emerged.
The development comes as Government yesterday released wheat production trends from 2000 to 2010, which showed a major decline from 45 551 hectares (229 775 tonnes) to 14 195 hectares (41 506 tonnes) last season.
So dire is the situation in the industry, the Bakers Association of Zimbabwe held a crisis meeting in Harare yesterday and called for urgent Government intervention.
“The tight liquidity situation in the country is one of the major factors that have negatively affected the Bakers Association of Zimbabwe members and millers who have no access to funding for their operations.
“As a result companies are failing to recapitalise hence capacity utilisation has remained subdued at 15 percent in the baking industry which is currently producing only 600 000 loaves bread, which is a far cry from the national daily requirement of 1 600 000 loaves,” said BAZ president Mr Wellington Peyama.
Obsolete machinery has worsened the situation in the industry as it has no capacity to meet national demand.
“On the other hand, banks are not forthcoming with loans while the struggling bakers and millers have no collateral for the expensive loans where some banks may be willing to assist,” Mr Peyama said.
But while other bakeries are struggling, Innscor’s Bakers Inn recapitalised last year and installed state-of-the-art baking equipment enabling it to up its capacity utilisation by 50 percent.
Lobels, which used to be a major baker, is among those struggling. An audit at the firm last year showed the misuse of millions of dollars, which might have contributed to the firm’s woes.
Mr Peyama said the industry was heavily indebted with some of the debts dating back to the Zimbabwe dollar era.
“The bank loans are also too expensive for the struggling industries which are also levied 30 percent as charges when depositing South African Rand coins.
“The banks have justified the charges by saying that it is too expensive to handle the coins which are also being shunned by retailers due to disagreements over the exchange rate,” Mr Peyama said.
He said bakers were also saddled with numerous lawsuits filed by creditors like banks, millers, power utility Zesa Holdings and suppliers of raw materials.
“The situation is dire and we are operating from hand to mouth amid high operational costs which have been worsened by very high utility bills,” Mr Peyama added.
He said the country was also facing a critical shortage of flour and bakers have to import it from Mozambique at between US$500 and US$580 per tonne excluding transport costs.
Mr Peyama said bakers require 22 000 tonnes of flour per week but there is less than 10 000 tonnes in stock.
The national annual wheat requirement stands at 450 000 tonnes.
Mr Peyama said flour shortages have been worsened by the failure by local farmers to produce enough to wheat as a result of the illegal Western sanctions and the climate change.
Problems in the industry have been epitomised by developments at Lobels where according to Mr Peyama capacity has plunged from 400 000 loaves a day to 10 000 per week.
“Some bakeries are facing imminent closure while 281 out of 300 millers having already shut down, leaving the country to rely on only 19 millers. Zimbabwe is most likely to face a serious and crippling shortage of bread a situation which has to be urgently averted,” Mr Peyama said.
Principal director in the Ministry of Agriculture, Mechanisation and Irrigation Development Mr Joseph Gondo urged millers and bakeries to sponsor farmers on a contract farming basis to ease the wheat shortages.
Government has targeted 45 000 hectares for wheat production this year with an estimated yield of 180 000 tonnes
“Government has earmarked US$10 million for the coming season.
“However, this only covers 16 000 hectares of the targeted 45 000 hectares,” Mr Gondo said.
He said the agriculture ministry had requested US$30 million from treasury for winter wheat production.