National Foods, one of the largest food manufacturers in Zimbabwe, announced it would be shutting its doors because it had been unable to pay its suppliers due to a crippling shortage of foreign currency.
Zimbabwe’s biggest food processing company said it is closing its wheat mills because it cannot import the commodity amid foreign currency shortages. In a letter to its “valued customers” the company - jointly owned by Tiger Brands and Innscor Africa, an Harare-listed company - National Foods said it anticipated the mills in Harare and Bulawayo would close.It said it would still mill out wheat in process and supply the limited stock it had in hand.
The company, which has fast foods, maize and flour milling, snacks manufacturing, poultry and edible oils units under its portfolio, blamed foreign currency shortages for the impending closure of its mills. Zimbabwe, which abandoned its own currency in 2009 to use a basket of currencies mostly led by the US dollar, is in a serious economic bind - foreign currency, fuel and medical supply.
Reacting to reports that the National Foods is threatening to shut down its factories, Industry Minister Mangaliso Ndlovu said Zimbabwe has enough wheat to last four months. The Zimbabwe Grain Millers Association suspended the supply of bread and self-raising flour to biscuit producers to reserve it for bread.
Zimbabwe requires about 460,000 tons of wheat annually. The national wheat requirement is 38,000 tons a month with Zimbabweans consuming at least 1,5 million loaves a day. For now, There are fears that bread is going to disappear from store shelves and the price for wheat products will skyrocket, making life even more unaffordable for the average Zimbabwe citizen.
Zimbabwe Farmers Union Executive Director Paul Zakariya says the wheat shortage is the result of controversial land reforms that displaced most commercial white farmers and rewarded black peasant farmers who had no experience and no resources to work the land. “When we had that adjustment in the resource that we call land, a lot of things in production and productivity in that sense was negatively affected,” he said. “We saw the trends now going down from 2002 or 2001 when we hit a peak of 235,000 tons of wheat in Zimbabwe. We dipped to very, very low and pathetic levels of about 20,000 metric tons during the 2010 period up to the 2015 period.”
ZIMBABWE MOVES IN TO REDUCE
The resolution taken by cabinet encouraging millers and bakers to establish outgrowers scheme in wheat production will boost food self sufficiency and reduce the trade deficit. The government set a new producer price of $630 per ton from $500 in order to promote local wheat production for the upcoming wheat crop season. Zimbabwe spends at least $250 million annually for wheat imports to compliment local production which suffered decline over the years.