$120m needed for adequate supply of fertilisers to farmers

$120m needed for adequate supply of fertilisers to farmers

$120m needed for adequate supply of fertilisers to farmers

Source: $120m needed for adequate supply of fertilisers to farmers | Sunday News (Business)


Dumisani Nsingo, Senior Farming Reporter
THE country’s fertiliser manufacturers need about $120 million to ensure adequate supplies of the input ahead of the forthcoming 2017/18 summer cropping season.

Zimbabwe Fertiliser Manufacturers’ Association chairperson Mr Tapuwa Alvin Mashingaidze said adequate supplies of fertilisers to farmers could only be achieved upon timeous procurement of raw materials.

“To meet the country’s total demand, some $120 million of forex will be required. RBZ (Reserve Bank of Zimbabwe) has been very supportive but is obviously managing with severe constraints. The industry has various schemes in place including consignment stock systems with key suppliers where stocks are held close by in Harare warehouses or ready for dispatch in Beira.

“These stocks require to be unlocked through ongoing forex allocations or guarantees of future allocations by RBZ. It is expected that allocations for fertiliser raw material imports will improve once the $600 million facility mentioned recently by the RBZ Governor (Dr John Mangudya) becomes available this month,” Mr Mashingaidze said.

Fertiliser stock holding by ZFMA members stood at around 120 000 tonnes of all types of fertilisers including basal and top dressing as at 30 August against an estimated annual demand of about 400 000 tonnes.

Mr Mashingaidze also said another key issue of ensuring sufficient supplies was expediting the procurement of raw materials to enable utilisation of all the installed capacity.

“The key issue to ensure sufficient supply is timeous procurement of adequate volumes of raw materials to enable utilisation of all the installed capacity taking into account the fact that lead times for these materials are typically 3 months.

“Assurance of supply requires that raw materials being used right now be constantly replenished through ongoing provision of nostro allocations or forex. Much of the raw materials being used are being drawn from Consignment Management Stocks which have to be paid for in forex before the fertilisers can be released,” he said.

The Zimbabwe fertiliser industry now consists of at least 10 companies competing to supply the market comprising the Command Programme, the Presidential Schemes and the Cotton Scheme sponsored by the Government as well as privately funded contract schemes for tobacco and other crops.

In the last two years, significant new investments have been made into additional blending plants which have seen the country having well over 1,2 million tonnes of installed capacity to produce NPK compounds and blends depending on the availability of raw material.

“It is also helpful if farmers and all the major schemes supported by Government begin buying, collecting and paying for their requirements of fertilisers well before the rains. This will avoid the problematic bunching that leads to excessive pressure on the industry and short term stock outs associated with the supply chain failing to cope with huge instant demand. Early off take by the market also improves the industry’s ability to meet demand through working capital replenishment and reducing the maximum level of cash that has to be tied up in stocks,” said Mr Mashingaidze.

Fertiliser shortage has over the years been one of the factors affecting the country from realising optimum crop yield.