Forex crisis hits fertilizer industry 

Source: Forex crisis hits fertilizer industry – NewsDay Zimbabwe

BY MOSES MATENGA

LOCAL fertiliser producers have bemoaned the shortage of foreign currency which has hampered production, adding that the foreign currency auction system introduced by the central bank was failing to meet their needs.

Zimbabwe Fertilizer Company (ZFC) managing director Richard Dafana pleaded with government to ensure the companies get the required foreign currency to support production.

“I want you to notice the hunger for foreign currency. There are materials that need a lot of money and we are in serious need of foreign currency,” Dafana said during a tour of factories in Harare, Kadoma and Bindura by members of the Parliamentary Portfolio Committee on Agriculture chaired by Gokwe-Nembudziya MP Justice Mayor Wadyajena.

“Auction floors have been good, but only for small users of foreign currency. Fertilizer is a high user and auction floors cannot support the huge demand.”

The committee toured ZFC and Windmill in Harare before travelling to Sable Chemicals in Kwekwe.

Sable Chemicals chief executive Bothwell Nyajeka said the foreign currency auction system had been a huge success, though more was needed for them to meet their targets.

“That has allowed us to plan better in terms of sourcing raw materials and plan better in terms of our production and making sure that we produce and deliver,” he said.

“Currently, we get an average of US$500 000 a week. Obviously for us, we will need more. As we increase our capacity, we are going to need more than US$500 000 per week, but currently, it is enough.”

He said the company would invest US$11 million this year as part of plans to increase production.

“We are going to increase numbers of rail tankers and production capacity. It will be a first step towards achieving our target,” Nyajeka said.

Responding to questions on why fertilizer in Zimbabwe was more expensive compared to other countries in the region, Windmill boss George Rundongo said it sometimes had to do with poor planning and delays in accessing finance.

He said governments in other countries were subsidising the product, hence the low prices.

MPs asked why Zimbabwe had perennial fertilizer shortages when companies were producing all year.

The firms said there was need for early planning to meet demand.

COMMENTS

WORDPRESS: 1
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    Dr Ace Mukadota PhD 6 months ago

    There is no such thing as a shortgae of forex comrades. The problem is that so long as the RBOZ rigs the USD at the incorrect rate ( overvalued ZW dollar) there will be a black market. People will not sell their USD because the rate is incorrect – this is a fact of life. ZW and before that Rhodesia for going on 60 years have had an overvalued rate & this is why we think we have a shortage.
    There is no shortage of USD in Botswana or South Africa as their currency rates are more open and transparent – think about it comrades.