Cash crisis impedes grain imports: GMAZ

June 24, 2016 in Business

THE Grain Millers Association of Zimbabwe (GMAZ) is set to hold a meeting with the Reserve Bank of Zimbabwe (RBZ) over Telegraphic Transfer (TT) delays which have affected imports posing a threat to the food security situation.

BY TARISAI MANDIZHA

Currently TT transactions are taking four months, while before the cash crisis they would clear in one week.

In a circular to its members, GMAZ said the meeting with RBZ has been confirmed and some of the issues to be discussed include access to cash for maize and soya beans purchases, outstanding foreign payments for maize, wheat, rice and soya beans imports and future TT payments regime.

“There is a suggestion that, in light of the TT delays and the need to prioritise grain imports in a co-ordinated manner, RBZ may just appoint a single bank to handle grain TT payments,” read the circular.

An industry source told NewsDay that the cash challenges were posing a serious threat to food security.

“Delays are posing a serious threat to the food security in the country and this can negatively impact on the supply of flour, stockfeeds, bread and other things,” he said.

The miller said the purchase of maize was different from that of tobacco as currently in Zimbabwe maize producers were mainly small-scale farmers who produce at least one tonne.

Currently the price of maize is $300 per tonne.

“We need cash, if we don’t have cash this will result in side marketing where farmers will end up being trapped to sell their grain at $100 to unscrupulous dealers and this will affect farmers that they would not be able to go back and prepare for the next season,” the miller said.

“We are appealing to banks so that we can access cash to purchase maize and we can’t use any other payment method apart from cash, and by so doing we are putting cash into the market.”

Another player said the delay in TT transactions was affecting their relationships with suppliers.

He said millers had an arrangement with suppliers to receive grain and pay later, but this arrangement was also being affected by failure to settle payments timeously.

“Currently millers require at least $30 million to offset the current debt to supplies so that they are able to continue receiving grain. It’s not that the money is not available, but it’s sitting in bank accounts. There is need to settle the outstanding amount, so that we continue to receive grain,” the miller said.

Finance minister Patrick Chinamasa said on Wednesday the grain reserves are at 120 000 metric tonnes, enough to last for four to five months.

GMAZ has also imported more than 300 000 metric tonnes of maize to address the food crisis caused by the El Nino-induced drought.

In February, the government launched a $1,5 billion food aid appeal to feed an estimated three million people following the El Nino-induced drought that affected southern African countries.

Government said it was addressing the national deficit of 700 000 tonnes of maize through imports of grain from a number of countries, with the help of the private sector.