Chemplex to import 400k tonnes fertiliser

TINASHE MAKICHI


Chemplex Corporation has started making preparations to import about 400 000 tonnes of fertiliser for the summer cropping season despite funding constraints likely going to affect Treasury due to the Covid-19 pandemic.


Chemplex will require about US$90m importing Compound D and Ammonium Nitrate fertilisers.


Company’s chief executive and Zimbabwe Fertiliser Manufacturers Association chairman Tapuwa Mashingaidze said the foreign currency
remained an albatross around the necks of several fertiliser producers especially on the back of the Covid-19 pandemic.


“The Covid-19 pandemic has been a challenge because there are bound to
be financing and logistics issues. However, the government has promised to
avail the required funds and now the focus is on importing the product for
the upcoming summer cropping season,” Mashingaidze said.


“At the moment we are on the planning stage but the availability of
foreign currency remains a challenge.”


The fertiliser industry in general has been facing challenges in securing
foreign currency for them to produce around 600,000 tonnes of fertilisers required to meet the country’s annual fertiliser demand. Last year,
the industry had a headache to raise USS$135m.


The constrained foreign currency availability saw some fertiliser companies going into the parallel market at a time when the Reserve Bank of Zimbabwe was overwhelmed by multiple forex demands in the economy. The country has three major manufacturing firms — Sable Chemicals, Windmill, and the Zimbabwe Fertiliser Company.

The trends in the supply of fertilisers in Zimbabwe have been driven by key factors such as government policy, market information, and infrastructure while on the demand side farmer’s capacity to acquire fertilisers, vailability of water (rainfall) and farmer’s knowledge on fertiliser use have been key drivers.


From 1930 to early 1990s the government maintained direct controls
on fertiliser trading through foreign currency rationing.

The demand for agricultural inputs including fertilisers increased during the period 1980 to 1987 owing to the growth in the number and size of smallholder farmer’s loans granted by Agricultural Finance Corporation and favourable weather.


In the 1990s the industry was liberalised and the liberalisation removed
price controls, subsidises and access to foreign currency by few privileged
firms.

Although the fertiliser industry was in private hands, mandatory government approval of fertiliser compositions and import permit requirements still remained in place.


The reforms ushered in competition, but because of high entry barriers, the traditional firms maintained a comparative advantage.

Following the agrarian reform in 2000, the country was plunged into constraints ranging from foreign currency shortages and hyperinflation thereby affecting fertiliser production and consumption.

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