The country’s banana producers are crying foul owing to the continued weakening of the South African rand, which is making them uncompetitive.

Kenneth Matimaire

MUTARE — Zimbabwe’s banana market could face an oversupply after leading producers stopped exports to South Africa, the country’s biggest market, due to the depreciation of the rand.
South Africa has become a risky export market for Zimbabwe, which is a high-cost producer.
Zimbabwe also operates under a multi-currency regime, dominated by the United States dollar, which deprives the central bank of control over the exchange rate and money supply.
Increasingly, local banana producers are finding the going tough in the export market, especially in South Africa and Zambia.
This has forced leading banana producers to temporarily stop exports to South Africa.
Ironically, this comes after some of the banana producers had pleaded with government to engage South Africa to revoke its ban on Zimbabwean bananas it issued in 2012.
The ban that lasted for two-years had been occasioned by the discovery, by the South African government, of a fruit-line disease associated with local bananas.
The ban had adversely affected local producers considering that South Africa is the biggest export market of the product.
This had led to an oversupply of bananas on the domestic market, which had the effect of pushing prices downwards.
The neighbouring country went on to rescind the ban in July last year.
Now, the country’s banana producers are crying foul owing to the continued weakening of the South African rand, which is making them uncompetitive.
The rand/US dollar cross rate is averaging R14/US$1.
Leading banana producer, Matanuska, has been forced to halt exports to South Africa, which stood at 5 000 tonnes per annum.
Johannes Makurumidze, Matanuska’s projects coordinator, said: “We no longer export bananas to South Africa because of the depreciation of the rand.
“The price of bananas has declined because the rand value is declining, which makes it difficult for us to sell bananas there. The buying power has also declined in that country and our main market is now only on the domestic market.”
Matanuska, which has banana plantations in various parts of the country, mainly in the eastern border province, produces 9 000 tonnes annually with a weekly supply hovering around 500 tonnes.
At least 30 percent of the annual supply is reserved for the export market.
Smallholder banana farmers, with a combined output of 7 000 tonnes annually, are also feeling the pinch after leading banana companies revised their buying prices downwards.
This has created friction between the companies and farmers as the latter acquired expensive loans to finance production against the current meagre prices set by the dominant players.
Banana smallholder farmers’ spokesperson, Artwell Bandama, said farmers were now breaching contracts owing to the low prices, which made it difficult for them to settle loans they acquired from financial institutions.
“We are now doing side marketing of bananas as a reaction to what we get after selling bananas from the right buyers. The contracts should also be revised to suit the current economic and operating environment,” said Bandama.
Established banana companies and smallholder farmers are now competing to supply the domestic market leading to an oversupply of the produce, which will cause prices to tumble.
This is exacerbated by the fact that 30 percent of the bananas that were previously reserved for the export market are now being sold on the local market.
Because this has resulted in a decrease in banana prices on the local market, the sector is now in desperate need of alternative export markets to remain viable.
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