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The Government has allowed farmers to import fertilisers directly from suppliers outside the country as the product is in short supply locally ahead of the 2023/2024 summer cropping season.
Speaking during the post-cabinet media briefing in Harare on Tuesday, Information, Publicity and Broadcasting Services Minister Jenfan Muswere said the local fertiliser industry is facing challenges and is unable to meet demand. He said:
<blockquote>
The local fertilizer industry is having challenges and the supply gap is being covered largely by imports.
The current fertilizer stocks held by the Zimbabwe Fertilizer Manufacturers Association (ZFMA) and those under the Collateral Management Agreement (CMA) have indicated that they have challenges meeting the surging demand ahead of the imminent summer season.
Meanwhile, the Government has approved that farmers import fertilizers directly from suppliers outside the country to augment local supplies whilst the Government develops a long-term solution to the fertilizer challenges.
</blockquote>
Zimbabwe’s national demand for fertilizers is estimated at 400,000 metric tonnes of basal and 380,000 metric tonnes of top dressing per annum for both the summer and winter cropping seasons.
Last month,  <a href="https://www.sundaymail.co.zw/eu-blocks-zim-fertiliser-consignment">The Sunday Mail</a> reported that around 23,000 tonnes of fertiliser donated to Zimbabwe by Russia have been blocked by the European Union (EU) due to its agricultural export blockade on Russia.
Muswere also said that the Government was allowing the importation of cement due to shortages in the market, which have caused hikes in the product’s price.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Pindula News

Zimbabwe Allows Farmers To Import Fertiliser To Plug Shortages

Capacity utilisation in Zimbabwe’s fertilisers industry has fallen drastically, with local companies only able to satisfy about 15% of the national demand.
This came out in a new report by University of Zimbabwe economics lecturer, Albert Makochekanwa which was commissioned by the Ministry of Industry and Commerce.
According to the report, the low capacity is attributable to power cuts, limited working capital, limited foreign currency to import critical raw materials and high interest rates which discourage the companies from borrowing, among other problems.
The other major problems facing the fertiliser industry include the non-availability of key raw materials in bulk quantities in the local market, smaller profit margins and the non-availability of fertiliser endowments. Part of the report reads:
<blockquote>
On average, actual annual production is about 90,000mt which only satisfies 15% of annual national demand.
Evidence shows that idle capacity is mainly due to the non-allocation of foreign currency to import ammonia gas which is one of the major ingredients in the production of fertiliser.
The average fertiliser manufacturing or production capacity utilisation for the year 2022 in the fertiliser sector was 52%, while the figure ranged between 80% on the upper bound and 38% on the lower bound.
</blockquote>
According to the report, the fertiliser companies produced about 90 000 metric tonnes in 2022 against a national demand of about 780 000mt.
Out of the 780 000mt that are required to meet national demand, 380 000mt are top dressing, and 400 000mt are basal fertilisers (compounds and blends).
The consumption of 380 000mt of top-dressing is further divided into top-dressing direct application (that is ammonium nitrate (AN)) and input into compounds (urea).
The consumption of 400 000mt of compounds is further divided into phosphate, potassium and AN.
The low capacity utilisation has resulted in Zimbabwe becoming a perennial importer of fertiliser.
More: <a href="https://zero.pindula.co.zw/">Pindula News</a>

Local Fertiliser Industry Producing 15% Of National Demand

The government says the sharp increase in fertiliser prices is a result of global shocks and is not affecting Zimbabwe only.
Addressing journalists on the sidelines of the Regional Strategic Analysis and Knowledge Support System (ReSAKSS) conference, Agriculture Deputy minister Vangelis Haritatos said there is a need for the country to produce the fertiliser locally. He said:
<blockquote>
The fertiliser issue is an international shock and it has got nothing to do with Zimbabwe.
We did not cause any of it, but our farmers are unfortunately being inconvenienced by the increasing price.
This is something we cannot get away from, unfortunately, because a lot of raw materials, between 55 to 60% of raw materials in any fertiliser that’s sold within our borders and even our neighbouring Zambia, Malawi and Mozambique are all dictated by international prices.
</blockquote>
Haritatos added that the government will consider the high fertiliser price when it announces the new pre-planting grain price. He said:
<blockquote>
Going forward for the summer season, what we can guarantee our farmers is yes we agree that we do not like the price of fertiliser, it’s a worldwide issue, even if you go to Zambia they are selling fertiliser at a higher cost, but as government and Agriculture ministry, we will ensure that we take into consideration all input costs.
What farmers have to understand is that the high cost of fertiliser will be compensated by a higher producer price for our summer grains.
</blockquote>
At the beginning of January this year, a 50kg bag of ammonium nitrate was pegged at around US$37 but is now being sold for at least US$55. | <a href="https://www.newsday.co.zw/agriculture/article/200002602/fertiliser-price-increase-a-result-of-global-shocks">NewsDay</a>

Fertiliser Price Increase A Result Of Global Shocks - Haritatos

A local financial service, IH Securities, has implored the government to ensure the prices of fertilisers come down to enable farmers to take advantage of the rainy season and maximise production.
This comes as prices of fertilisers have sharply increased due to the current Ukraine/Russia conflict, with the two East European countries the main global producers of fertiliser.
According to market watchers, the price of a 50kg bag of fertiliser increased to an average of US$94 by the end of June 2022 compared to US$55 during the previous cropping season. Said IH Securities:
<blockquote>
However, above-normal rainfall for the 2022/23 farming season is being forecasted which could potentially result in increased production.
High fertiliser prices coupled with decreasing commodity prices could discourage farmers.
We believe the government will continue implementing initiatives that reduce the cost of farming so as to encourage higher production.
Assuming this plays out, we forecast increased agriculture production and potentially reduced cereal import bill.
</blockquote>
IH securities, which offers brokerage and advisory services, noted that companies such as Hippo present investment opportunities. It added:
<blockquote>
These are companies with the ability to exercise monopoly and price leadership. We are also attracted to companies with good management and a culture of value creation for shareholders.
Given the anticipated above-normal rainfall in the coming farming season, Hippo presents an investment opportunity.
Dairibord at current levels looks oversold, speaking to an opportunistic buy.
</blockquote>
| <a href="https://www.newzimbabwe.com/govt-urged-to-deal-with-exorbitant-fertiliser-prices/">NewZimbabwe.com</a>

Govt Urged To Intervene On High Fertiliser Prices

Farmers have expressed concern over high input costs, especially fertiliser, and have implored the government to intervene and eliminate “profiteering” by businesses.
<a href="https://businesstimes.co.zw/concern-over-high-farming-input-costs/">Business Times</a> has established that a 50kg bag of top dressing fertiliser is now selling at US$60, a 33% increase from US$45 last year.
The price of basal fertiliser has also gone up by almost 50% to between US$35-45 per 50kg from around US$25-30 last season.
Zimbabwe National Farmers Union (ZNFU) secretary general, Stewart Mubonderi called for “sensible pricing”. He said:
<blockquote>
We have an excessive profiteering problem in our nation, where individuals want to earn a lot of money in one night, but there will be very few buyers due to the high prices.
So we ask the corporations doing this to be sensible and provide farmers with fair pricing, and also the government to engage them constructively and ensure that these unwarranted price increases we are seeing are stopped and avoided.
</blockquote>
The president of the Zimbabwe Commercial Farmers Union (ZCFU), Shadreck Makombe, said the high input prices would negatively affect the 2022/23 season. Makombe said:
<blockquote>
There is a need for the government to intervene in the short term through targeted and time limited input subsidies so as to alleviate the plight of vulnerable farmers and to ensure affordable and viable inputs.
It [the price of diesel] has been going down. We would have expected the prices of goods to also go down in tandem with the going down of diesel, which is one of the major inputs in prices.
Unfortunately it’s not happening that way. So at the end of the day farmers are the ones who are suffering.
</blockquote>
Makombe proposed that manufacturers of farming inputs deal directly with farmers to eliminate middlemen in order to reduce the high prices.

Farmers Bemoan High Input Prices

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