Seed Co pins hope on demand for small grains

Judith Phiri, Business Reporter

ZIMBABWE Stock Exchange (ZSE) listed, seed producer, Seed Co Limited is pinning its hopes on the demand for small grains to counter the decrease in annual sales volume that was recorded not only in Zimbabwe but also in neighbouring countries.

In the third quarter ended 31 December 2023, the company’s total volume of Zimbabwe seed sales witnessed a 28 percent decline compared to the corresponding period in the preceding year, a consequence of delayed rains and diminished enthusiasm for cropping due to the El-Nino phenomenon.

In a statement, group secretary, Mr Tineyi Chatiza said the delayed rains for the 2023/24 cropping season affected their sales.

“At present, Zimbabwe is actively working to establish consensus for the implementation of this year’s National Budget while simultaneously addressing the stabilisation of the foreign exchange market, curbing inflation, and restoring business confidence.

“Throughout the region, economies are also grappling with challenges such as shortages of foreign currency, inflationary trends, and escalating interest rates. From an operational perspective, the delayed rains this season led to increased demand for small grains and legumes, extending into the last quarter of the financial year in Zimbabwe and neighbouring countries,” he said.

“This demand for small grains holds significant potential to clawback annual sales volume performance not only in Zimbabwe but also in neighbouring countries.”

Regionally, he said record sales in East Africa and certain parts of Southern Africa were registered, which is anticipated to mitigate the overall impact of decreased trading in some Southern African markets that were adversely affected by El-Nino conditions.

Mr Chatiza said in inflation-adjusted terms they recorded a 41 percent increase in revenue of ZWL$266.5 billion, while the operating profit was ZWL$484.6 billion.

In historical terms, he said revenue was ZWL$194.8 billion and the operating profit was ZWL$96.0 billion.

“The increase in revenue, whether assessed historically or adjusted for inflation, aligns with increasing proportion of United States Dollars (USD) denominated sales against the pronounced depreciation of the exchange rate and the resulting inflationary impacts.

“The enhanced profitability outcome can be credited to the restoration of profit margins and the alignment of the exchange rate with open market forces experienced in the better part of the first half,” added Mr Chatiza.