Push to end GMB monopoly

LIVINGSTONE MARUFU

The Food Crop Contractors Association of Zimbabwe (FCCAZ) is pushing government  to break the Grain Marketing Board (GMB) monopoly  to allow the participation of the private sector in grain purchasing, Business Times can report.

The government through the  Statutory Instrument (SI) 145 of 2019, gave GMB monopoly over the importation and sale of maize in the country.

GMB is the sole trader of maize in Zimbabwe. The law also makes it illegal for people to trade in maize among themselves.

But,  FCCAZ  chairman, Graeme Murdoch, said there was need  to  amend the marketing laws to allow more players to participate owing to GMB’s failure to release the maize on time for the companies to mill their crop over the past few years.

“There is a need to address the matter of single  channel  marketing to improve on competition. The authorities should also level the playing field so that the contractors can participate,” Murdoch said.

He advocated the removal of subsidies to the millers in order to allow competition.

An executive with a local agriculture processing company, who requested not to be named told Business Times that the banks should support localised production so that the companies can have their own raw materials.

“We need to ramp up production locally so that we can have our own raw materials rather than relying on the GMB which takes time to process the purchasing of the cereals.

“This disrupts the group’s supply chains thereby creating artificial demand as it takes time to process the purchasing of the grain,” the executive said.

The development also comes at a time when the  retail price hike for mealie meal is looming in Zimbabwe after GMB increased the price of maize.

The price rose by at least 40% after GMB started selling grain to millers at higher prices on Tuesday last week.

The price has incrementally risen by 38% over a 90-day period to March 1. Sources in the grain sector and in government said the increase in the price of mealie meal is likely to push the cost of other basic commodities up.

It also comes at a time inflation has risen exponentially over the past month, with the United States dollar now trading at 1:250 on the parallel market.

“The GMB has been increasing the price of maize to millers every two weeks for the past 90 days and given that the government has removed the subsidy on the product, we are going to see a significant jump in the price of mealie meal starting Friday,” a source said.

“Millers are left with no option but to increase the cost of the commodity, which in turn will affect the consumer.

“Ultimately, the burden is tacitly left for millers who have to face the wrath of the consumers. When millers increase the price of mealie meal, they (government) go to town but when they increase the price of maize, they keep quiet.”

A 10kg packet of roller meal is selling at ZWL$1239 while refined maize meals costs ZW$1388, according to prices in most retail outlets checked by Business Times this week.