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Nelson Gahadza
Senior Business Reporter
Seed Co Limited, the country’s largest seed producer, is well-equipped for the upcoming sales season to cater to both Zimbabwean and broader regional markets.
In a trading update for the quarter to June 30, 2023, company secretary Tineyi Chatiza said production and processing plants have been strategically planned to accumulate an ideal mix of seed stock varieties to cater to preliminary El Nino forecast scenarios of below-normal to normal rainfall.
He said total seed sales volumes for the first quarter experienced 10 percent growth compared to the same period in the previous year.
Mr Chatiza said sales of wheat constituted 85 percent of the overall volume, a pattern consistent with the period under review.
“The volume growth was primarily propelled by a 7 percent and 19 percent surge in the sales of wheat and barley seeds, respectively. These increases are attributable to enhanced dam water levels and improved electricity availability for irrigation purposes,” he said.
Mr Chatiza said typically the first quarter serves as a phase of cost accumulation in anticipation of the primary crop, maize, and seed sales season in the latter part of the fiscal year.
The group’s revenue for the quarter grew by 648 percent and 305 percent when compared to the same period in the prior year in historical and inflation-adjusted terms, respectively.
“This growth is consistent with the sharp depreciation of the exchange rate and the consequent inflationary effects,” said Mr Chatiza.
In contrast to the prior year, the operating profit showed a positive swing of 10 times and 19 times when compared to the previous period’s inflation-adjusted loss and historical profit, respectively.
The company said the improved profitability out-turn is attributed to the recovery of profit margins and the alignment of the exchange rate with open market forces.
Seed Co said as the country is focused on the upcoming elections and expects a more stable socio-economic environment soon after the elections, that is more conducive for business and general economic activities to thrive.
The seed giant recently said it was investing more in drought-tolerant maize seed varieties to mitigate the effects of climate change.
Climate change is making droughts more frequent and severe globally, threatening food security.
In Zimbabwe, climate change is bringing harsher and more frequent droughts, threatening the staple maize crop.
In this regard, SeedCo has a breeding programme for developing early-maturing seed varieties that will counter the effects of drought.
In 2020, Zimbabwe launched a US$47 million 7-year project with the support of the Green Climate Fund and the United Nations Development Programme (UNDP), aimed at strengthening the climate resilience of vulnerable communities. Programs such as Pfumvudza smart agriculture have increased resilience against climate change-induced drought impacts and improved yields in rural communities in Zimbabwe where they have been implemented.
This has seen farmers fully embrace the Pfumvudza strategy so as to realise high yields and improve food security.
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