Commercial Farmers' Union of Zimbabwe

Commercial Farmers' Union of Zimbabwe

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Forex shortage hits stock feed makers

Forex shortage hits stock feed makers 

Financial Gazette 19/4/2018

Ndakaziva Majaka Deputy Markets Editor 

THE stock feed man­ufacturing industry has not been spared from Zimbabwe’s debilitat­ing foreign exchange short­ages, amid indications that failure to service offshore obligations led to a 27 per­cent slump in broiler feed production in the first half of 2017. 

Data from research firm IH Securities (IH) indicates that between January and June 2017, broiler and lay­er feeds production fell 27 percent compared to the same period in 2016 on the back of forex shortages. 

“The stock feed industry continues to express grave concern regarding the abil­ity to service foreign bills to procure essential feed in­puts (maize, soya, essential amino acids, minerals and vitamins),” IH said in its agricultural note. 

Average weighted broil­er and layer feed prices in the second quarter of 2017 were 5637 and 5473 per metric tonne (mt), respec­tively, being the same and three percent lower than prices in the first quarter of 2017. 

Meanwhile, the manu­facture of poultry feeds has continued to dominate the stock feed industry, with production rising five per­cent to 281 011mt in the year to December 31, 2017. 

IH said in 2017, poultry feeds worth $I64 million was produced, accounting for 63 percent of all feeds produced in the year. 

“Poultry feeds account­ed for 63 percent of all feeds produced by weight and 70 percent by mone­tary value, with a monthly average of 29 394mt (worth $16,8 million) and account­ed for 66 percent of all feeds produced by weight and 73 percent by monetary value,” IH said. 

Zimbabweans have turned to poultry produc­tion for commercial and subsistence purposes in die face of worsening economic conditions. 

Over the period Oc­tober to December 2016, the manufacture of broil­er starter and layer feeds, however, decreased compared to the same period last year. 

Annual day-old broiler cluck production decreased by one percent from 76 million in the 2015 season to 75 mil­lion in 2016, declining further to 69 million in 2017 follow­ing the Avian influenza outbreak. 

In 2016, broiler breeder numbers improved compared to 2015, but were still lower than 2014. Last year numbers however, dipped to a five-year low.               

“Local hatching eggs production dropped 10 percent in 2017 to 74 million, following a seven percent increase in 2016, while imported hatching eggs increased six percent year on year. “Prices for day-old chicks were 23 percent higher during the year to $76 per 100 versus $62 per 100 in 2016,” the research firm said. 

According to IH data, the number of broilers slaugh­tered was up four percent to 22, 7 million in 2017 from 21,8 million in 2016, including birds affected by the flu. 

“Estimated total broiler meat produced in 2017 was 10 percent lower year on year at 106mt due to a two and 14 percent decline in both the large and small sectors respec­tively,” the analysts at IH said. 

In terms of layer breeders, local production of hatching eggs declined by 27 percent while imported hatching eggs were also down 27 percent during the same period. 

The outbreak of the bird flu, which hit the country be­tween May and August 2017, left the poultry industry in a deficit after Irvine’s had to cull more than 800 000 chickens to prevent further spread of the disease. 

“This resulted in day-old chicks disappearing from the formal market, while prices on the informal market rose to around $90 per 100 chicks from between $65 and $70 previously. 

“Poultry producers were then forced to import hatching eggs from Europe on the back of local and regional short­ages. As such, the availability of broiler chicks declined by close to 500 000 per week,” IH said. 

The number of birds processed and broiler meat pro­duction in the large-scale formal sector in the first half of 2017 was two percent and eight percent lower, respectively, compared to the same period in 2016.

“This is reflected in the rise in whole bird wholesale prices by 11 percent from an average of S2,8S/kg in the first half of 2016 to S3,19/kg in the first half of 2017.


“Small-scale broiler meat production is estimated to have declined by five percent in the first half of 2017 rel­ative to the same period in 2016. Together with the eight percent decline for the large-scale sector, this led to first half total broiler meat production being six percent lower than during the same period of 2016,” the research firm said. 


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