Number of millers tumbles to 37

Business Reporter—

The number of flour millers in Zimbabwe has tumbled to just 37 from 368 in 2007 amid sharp competition from cheaper flour imports. Finance Minister Patrick Chinamasa says Government efforts to boost growth of the milling industry had been hamstrung by the flooding of foreign flour onto the domestic market.“Despite support measures availed by Government to the milling industry, the number of producers continue to shrink . . . due to competition from wheat flour imported from the region under bilateral agreements,” said Minister Chinamasa said recently.

Zimbabwe has spent a total $384,4 million importing flour during the period 2009 to 2015. In the first 10 months of this year, $16,7 million had been expended for the same purpose, ZimStat data shows.

Flour imports peaked at $100,6 million in 2011, with 2016 on course to becoming the least, thanks largely to a law passed earlier this year that restricts the importation of several commodities.

Minister Chinamasa said the milling industry was facing serious viability concerns, but there appeared to be green-shoots of hope.

He singled out the $40 million investment into Blue Ribbon Foods by Tanzanian firm, Bakhresa Group, as an indicator of the underlying value in Zimbabwe’s grain milling sector.

Bakhresa Group is taking over Blue Ribbon Foods multi-million dollar debts as well as availing capital to replace old equipment.

The deal has boosted capacity utilisation at Blue Ribbon Foods, enhanced domestic competition and caused flour prices to fall to $27 from $32 per 50kg, according to the Finance Minister.

“Such investments need to be nurtured, in order to enhance value addition and linkages with agro-processing and packaging industry,” Minister Chinamasa said.

“It is, thus, proposed to amend the bilateral rules of origin on flour, to the effect that the preferential treatment is granted to flour milled from wheat grown in the country of export.”

Minister Chinamasa has also promised to remove wheat flour from the “General Open Import Licence,” meaning that flour imports will be greatly monitored and restricted, a move long advocated by the milling industry.

Zimbabweans consume 216 million loaves of bread each year and 40 000 tonnes of flour for home baking. Locally produced flour only meets a fraction of the demand.