adminPrincess Ncube and Bernard Yombayomba
Most fertiliser manufacturers claim they only received about half of the foreign currency they needed to produce for the current season, a development that has resulted in shortages and price hikes, according to the Zimbabwe Fertiliser Manufacturers Association chairman Tapuwa Machingaidze.
He said the Government’s supported farming programmes have propelled demand for fertilisers, with the country now requiring 600 000 tonnes annually of both ammonium nitrate and compounds.
“We estimate that about $135 million in forex would have been required to produce and supply the above volume of fertilisers,” Machingaidze said recently.
“Most companies secured between 20 percent and 50 percent of their requirements. For top dressing supplies perhaps 50 percent of the demand is not being met due to the supply constraints.”
Price spike
This has triggered price increases which have shot beyond the reach of many, with a 50kg bag of ammonium nitrate now going for between $65 and $70 depending with the dealer and location, up from $45 and $51.
Zimbabwe is struggling to pay for critical imports due to a crippling foreign currency shortage that has resulted in shortages of critical commodities such as fuel and medical drugs.
Zimbabwe, which adopted a basket of multi-currencies in 2009, dominated by the Unites States dollar as anchor currency to tame hyperinflation, was reported to have low levels of forex reserves in September last year resulting in authorities prioritising allocations.
Surging demand
Some of the State-assisted farming programmes include Command programmes and the Presidential Free Inputs Scheme meant to support vulnerable populations.
“Fertiliser shortages hamper agricultural recovery and are a result of foreign currency challenges being faced by producers who are failing to procure adequate volumes of raw material required despite having the available factory capacity that surpasses the national demand,” said Mashingaidze.
He said the Government should reconsider its position to allow free importation of fertiliser, but instead put mechanisms to ensure enough foreign currency is provided to local producers to boost demand.
Government recently allowed import of fertiliser to argument local production.
However, even after lifting the import restrictions on fertilisers, local farmers are struggling to mobilise resources to import the commodity. The Government itself, has reportedly failed to provide forex to its suppliers.
Last week, the Tobacco Industry and Marketing Board confirmed it only provided fertilisers to 11 000 small-scale farmers under a contract scheme it is running on behalf of the Government — about a fifth of the farmers it was targeting.
“Forex allocation can be improved so that it is used to best advantage,” said Mashingaidze.
“For example, it is better to buy raw materials and manufacture Ammonium Nitrate and other fertilisers locally than to import finished fertilisers.
“Apart from South Africa, Zimbabwe is the only country in the region that boasts a well-established fertiliser industry whose capacity far exceeds national requirements.”
Fertiliser companies in Zimbabwe
There are five fertiliser manufacturing firms in Zimbabwe namely: Champlex Corporation, Windmill, Origen Corporation, Sable chemicals, ZFC limited and Agriman Fertiliser Zimbabwe.
Bongani Ndlovu