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Edgar Vhera Agriculture Specialist Writer
A STALEMATE between farmers and buyers over the wheat asking price and buyers’ bid brought business to a standstill at this week’s Zimbabwe Mercantile Exchange (ZMX) weekly commodities auction amid indications that deliveries of last season’s maize and soya beans had reached their lowest ebb.
Announcing this week’s trade results, a ZMX twitter post indicated that there was a price deadlock on the auction with the accompanying ZMX statistics also confirming that there were no bids and offers for maize.
Farmers had offered 10, 18 tonnes of soya beans at an average price of US$520 per kilogramme worth US$5 293, 60 while buyers sought 60 tonnes of the product at an average price of US$490 per tonne valued at US$29 400.
The bid-offer price spread was US$30.
At the end of the trade all the 70, 18 tonnes of bids and offers at an average price of US$494, 35 with a total value of US$34 693, 48 were unsuccessful.
Farmers at Aspindale depot offered 89, 38 and 20, 56 tonnes of premium and standard grade wheat at average prices of US$422 and US$390 per tonne respectively. Buyers bid for 1 000 and 200 tonnes of premium and standard grade wheat ataverage prices of US$405 and US$360 per tonne correspondingly.
The bid and offer price spread was US$17 and US$30 for premium and standard grade wheat individually.
Buy end of day all the 1 089, 38 and 220,56 tonnes of bids and offers for premium and standard wheat valued at US$442 691, 35 and US$80 063, 28 respectively were unsuccessful.
Wheat farmers in Chegutu offered for sale 208, 98 and 26, 30 tonnes of premium and standard wheat at average prices of US$420 and US$410 per tonne correspondingly. Buyers bid for 500 and 90 tonnes of premium and standard wheat at average prices of US$390 and US$380 per tonne proportionately.
No trade occurred as all the 708, 98 and 116, 30 tonnes of bids and offers of premium and standard wheat worth US$282 883, 02 and US$45 008, 10 correspondingly were unsuccessful.
Commenting on the results ZMX chief executive officer Mr Collen Tapfumaneyi said marketing of the 2022/23 maize and soya bean crops was now tailing off and this naturally resulted in lower trading volumes.
With regard the winter wheat, he said deliveries into the warehouse receipt system had commenced.
“The price discovery process has started and bids and offers are already being registered. However, farmers are generally not accepting current prices being offered by buyers, opting to wait for prices to firm, which is an option available to them under the warehouse receipt system,” said Mr Tapfumaneyi.
Stockfeed Manufacturers Association of Zimbabwe (SMAZ) executive administrator Dr Reneth Mano said the fact that there were no trades completed was very worrisome especially considering that bread, cakes, buns and baguettes were being made every day and every month.
“The country’s bread industry uses 21 000 tonnes of wheat (approximately 14 500 tonnes flour) per month to make the equivalence of 20, 4 million loaves of bread per month. At this rate of wheat consumption, Zimbabwe needs only 250 000 tonnes of premium wheat for the baking industry. Where is the baking industry getting its flour if it’s not buying the new wheat crop?” Dr Mano queried.
Dr Mano thinks bakeries want to keep the wheat prices subdued at US$410 per tonne in order to keep the flour prices at below US$600 per tonne so that the retail price of a loaf of bread is kept below US$1 per loaf for sales growth.
Online Reporter