Commercial Farmers' Union of Zimbabwe

Commercial Farmers' Union of Zimbabwe

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Oil firms suspend production

Oil firms suspend production

By Roadwin Chirara, Business Writer
Wednesday, 11 May 2011 16:30

HARARE – Two of the country’s largest oil producers National Foods 
(Natfoods) and Olivine Industries (Olivine) have suspended production at 
their factories due to a biting soya bean shortage.

The industry has a total crushing capacity of 350 000-plus metric tonnes of 
soya beans for foods and edible oil production, but is only able to process 
50 000mt of the crop at the moment.

“We require 50 000mt per annum of soya beans to be able to operate optimally 
(but) we do not believe the national (is) more than 40,000mt this harvest 
(season),” Natfoods managing director Jeremy Brooke said this week.

He said the continued shortages had resulted in the company placing edible 
oils plant in Bulawayo and Harare under care, and maintenance for over a 
year now.

Brooke said the company had resorted to supplying its products through an 
outsourcing arrangement to meet its customer requirements.
“We currently produce edible oils through an outsourced toll-crush 
arrangement,” the Natfood boss said.

He said the company had also resorted to importing soya from as far afield 
as India and Malawi to augment local supplies.

“National Foods is importing soya meal from India for stock-feed 
manufacturing and a small amount of soya beans from Malawi for crushing 
locally to produce oil and meal,” he said.

Olivine managing director Jonas Mushangari also said the company was relying 
on imports to meet its production requirements.

“Zimbabwe has a demand, which is higher than supply and our plants will run 
as much as they can with what we have, and imports then make up the 
balance,” he said.

“It’s a seasonal issue and there is nothing new in us placing our plant on 
maintenance, while we await delivery of the crop,” Mushangari said.

However, the Southerton-based company faced challenges such as high 
international prices and not being able to buy genetically modified beans 
when sourcing for the crop.

“They are factors such as high prices and genetically modified crops when 
sourcing for imports. If we buy soya beans at high prices our oils become 
uncompetitive compared to imports,” he said.

Mushangari said a solution to the current shortages was needed urgently if 
future production of the crop was to be secured.

“The solution is for soya beans to be grown locally,” he said.

As a result of the shortages, local oil prices are poised to increase at the 
back of higher soya prices of US$500-US$600 per tonne.

Zimbabwe’s agriculture sector and output have significantly declined over 
the years due to the effects of President Robert Mugabe’s land reform 
programme, which has also affected many sectors of the economy.

Just recently, drinks maker Schweppes Zimbabwe Limited announced 
interruptions to its production owing to a shortage of oranges – partly 
blamed on the chaotic agrarian reforms.

Despite a projected increase in the output of some crops, soya beans is 
expected to remain at 50 000 tonnes for this season compared to 170 000 
tonnes at its peak.


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