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Michael Tome
Business Reporter
The Competition and Tariff Commission (CTC) has implored players in the dairy processing industry to explore and tap opportunities in trade agreements Zimbabwe signed with international partners to drive growth and diversify markets
CTC, in partnership with the Dairy Processors Association of Zimbabwe (DPAZ), has been on a drive to enlighten local dairy processors on the vast market opportunities provided by agreements like the European Union (EU) – Eastern and Southern Africa (ESA) interim Economic Partnership Agreement (iEPA) and United Kingdom (UK)-ESA iEPA.
Zimbabwe is a signatory to the treaties, and leveraging on them would give local dairy processors an advantage and the latitude to diversify their exports.
The iEPA and the Eastern and Southern Africa (ESA) pacts, in particular, aim to encourage trade development by establishing free trade relations between the EU and the Less Developed Countries (LDCs).
Dairy processing is a critical economic sector locally, and conscientising dairy processors on the opportunities presented by the EPA is critical for local players, principally for market access.
Zimbabwean dairy processors currently export their products to regional markets mainly Mozambique, Zambia and Botswana under the Southern African Development Community (SADC) and Common Market for Eastern and Southern Africa (COMESA) Free Trade Area Agreements.
“The iEPA is an agreement aimed at encouraging development by establishing free trade relations between the EU and the countries concerned.
“Zimbabwe’s dairy sector is critical and the training of dairy sector processors on the iEPA is essential in maximizing the trade agreements benefits, especially on how to access this market and exploit available opportunities.
“Training dairy sector processors on the iEPA first entailed understanding the product categorisation treatment under the iEPA,” said the Competition and Tariff Commission in its 2023 second quarter communique.
Dairy processors mainly produce Ultra-high temperature (UHT) milk, ice creams, yoghurt, cheese, dairy spreads, and juices.
According to CTC, local players can also utilise the EU-ESA-iEPA agreements for sourcing their raw materials.
Zimbabwe obtains its dairy packaging materials mainly from France, India, China, South Africa, Pakistan and Kenya, while stabilisers are imported from South Africa.
Milk powders are normally accessed from South Africa and Denmark, spare parts from France, and the Netherlands while compounds and vitamins are imported from Egypt and Vietnam.
Earlier this year, the dairy sector indicated it was eyeing to grow milk production to at least 103 million litres per annum in 2023 from 91, 4 million litres realised in 2022, through diversified efforts from the government, processors and development-funded projects.
According to the Dairy Services Unit, the half year to June 2023 has seen an eight per cent growth in terms of milk intake by processors as month-on-month production has been above levels of last year, with January recording the highest intake of 7,5 million litres compared to 6,6 million litres in 2022.
The country was once a net exporter of milk and dairy products, producing over 260 million litres per year at its peak in the early 1990s.
As such, the sector has set a target of surpassing the 131 million litres mark per annum by 2025 as espoused in the National Development Strategy ((NDS 1).
The local dairy sector is, however, afflicted by a number of challenges which demean the growth, viability and competitiveness of the dairy sector.
These include a limited number of dairy animals and weak genetics in the dairy herd, high production and processing costs, limited access to affordable finance and foreign currency, high compliance costs and effects of climate change.
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