Govt moves to avert fertiliser shortages

14 Aug, 2022 - 00:08 0 Views
Govt moves to avert fertiliser shortages

The Sunday Mail

Business Reporter

The Reserve Bank of Zimbabwe (RBZ) has approved US$70 million worth of Letters of Credit (LCs), part of which will be used to import fertiliser and agro-chemicals ahead of the forthcoming summer cropping season.

The LCs – issued under Afreximbank’s US$150 million facility – will also go towards procurement of wheat, equipment and machinery.

Farmers have been calling on Government to import fertiliser on time to avoid delays in deliveries due to supply disruptions that may result from the ongoing conflict between Russia and Ukraine.

According to some industry players, stocks have depleted.

Domestic fertiliser manufacturers are not well capitalised to meet national requirements.

This year, the number of households that will be supported through the Presidential Free Cotton Inputs Scheme and Pfumvudza/Intwasa has been increased to three million from 1,8 million.

“The bank has also approved around US$70 million worth of LCs, which are in the pipeline, for the importation of essential commodities such as raw materials, plant and equipment, wheat, fertiliser and agro-chemicals,” RBZ Governor Dr John Mangudya said in the Mid-Term Monetary Policy Statement released on Thursday.

The central bank, he said, was also working with its local and external partners to unlock offshore lines of credit to support the country’s foreign currency requirements.

LCs worth US$145 million were issued during the first seven months of the year.

Zimbabwe Farmers Union (ZFU) executive director Mr Paul Zakariya, however, expressed concern over profiteering by local fertiliser suppliers.

“While a bag of fertiliser is going for between US$70 and US$80 in Zimbabwe, you can get the same bag at US$55 in Zambia,” said Mr Zakariya.

“It’s typical profiteering. It is like the ongoing conflict between Russia and Ukraine is only affecting Zimbabwe.”

In light of the Russia-Ukraine conflict, Zimbabwe is already looking for alternative source markets for the critical input.

The conflict in Eastern Europe, which began on February 24, has affected fertiliser shipments and pushed prices to record highs. Russia is the primary exporter of ammonia, and sanctions imposed on the country by the West inevitably affect supplies to the world market.

Last year, Russia and Belarus accounted for 40 percent of global exports of potash.

Moscow also accounted for 22 percent of global exports of ammonia gas, 14 percent of global urea exports and 14 percent of mono ammonium phosphate.

Last week, Industry and Commerce Minister Dr Sekai Nzenza said Zimbabwe will soon launch two fertiliser facilities to boost local production.

The facilities to be commissioned are a fertiliser granulation plant at the ZimPhos factory in Harare and the revival of the limestone and gypsum mine in Rushinga, Mashonaland Central, by G&W Industrial.

“We are targeting to increase production of fertiliser so that we will be able to insulate ourselves from unforeseen situations like the ongoing conflict,” said Minister Nzenza.

Zimbabwe has 12 fertiliser companies, with newer ones being involved in making blended NPK compounds.

Out of these, three are involved in the primary production of raw materials.

Dorowa Minerals mines phosphate rock in Buhera, which is converted to fertiliser grade by ZimPhos in Harare.

Sable Chemicals in Kwekwe produces AN from imported ammonia following decommissioning of its electrolysis plant three years ago. At the secondary level, three companies are involved in granulation and these are ZFC, Windmill and FSG.

Windmill also operates blending plants.

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