Govt increases flour import tariffs
Written by Ndakaziva Majaka, Staff Writer
Sunday, 22 July 2012 10:40
HARARE – The Zimbabwean government has approved an increase on wheat flour
import duty from five percent to 20 effective August this year.
Speaking during the presentation of the Mid Term Fiscal Statement budget,
Finance minister Tendai Biti said the move is meant to protect the local
milling industry and at the same time encouraging the local beneficiation of
wheat.
“The continued importation of flour inhibits growth of the local milling,
agro-processing, packaging and transport industries, as well as revival of
the national herd, since the by-products of wheat milling are currently
inadequate to meet requirements for stock feed,” the minister said.
He said whilst the local milling industry has capacity to meet national
demand, the installed plants are not optimally utilised, due to the
continued surge in wheat flour imports.
The Treasury chief said although government had introduced customs duty on
wheat flour at a rate of five percent in January, wheat flour imports
increased by six percent compared to the same period for the previous year
2011.
Due to quality issues, Zimbabwean wheat flour has been traditionally blended
with imported flour.
In light of this, government ensured that the increase in import duty
facilitates for players in the baking industry to continue importing 25
percent of their wheat flour requirements or 3 000 metric tons per month,
which is necessary for blending, at the current rate of duty of five
percent.
Biti said the flour imports at reduced rates will be supervised under the
ministry of Agriculture.
He assured the nation that the new import measures will not translate into a
higher price of bread.
Biti promised that government will continue to monitor the price and
capacity of local millers to supply wheat flour, in order to ensure stables
price of bread.
According to the fiscal statement wheat production has declined, with a
substantial number of wheat farmers switching to other crops, as reflected
by about 8 000 hectares planted in 2012 from 15 982 hectares in 2011.
“This translates into productivity levels of 3,4 tonnes per hector compared
to the highest of 5,7 tonnes per hector achieved in 1993.”
This comes after Zimbabwe Farmers Union (ZFU) economist Prince Kuipa
predicted a major decrease in wheat production this year.
Kuipa said winter wheat output would be lower than the previous yield as a
result of electricity problems affecting the country in general and farmers
in particular.
The erratic electricity has affected the industry.
ZFU is on record saying wheat is not a viable product due to the erratic
electricity supplies its farmers get. According to ZFU, even if a farmer has
money to venture into wheat farming the unreliable electricity supplies
would discourage the farmer and a loss ultimately.
Grain Millers Association of Zimbabwe (GMAZ) called on government to raise
its waiver on wheat flour imports, despite the low production predictions.
Tafadzwa Musarara, GMAZ chairperson, is on record saying the milling
industry has now managed to reposition itself in terms of securing adequate
wheat stocks in the country, so the waiver of customs duty and uncontrolled
importation are no longer necessary.
A business report compiled by the Commercial Farmers Union last year,
indicates the country needed to import some of its wheat in a desperate
attempt to meet its annual consumption requirements of about 450 000 tonnes.
In June last year, wheat output was projected to be at 10 000 tonnes from
the 15 000 tonnes that was realised in 2009.