LIVINGSTONE MARUFU
Listed seed producer, Seed Co International, is banking on the International Monetary Fund (IMF)’s record cash injection to economies it operates in on the African continent, which it expects to help bolster liquidity in markets, Business Times can report.
In an unprecedented move, the Bretton Woods institution through its reserve asset known as the special drawing rights (SDR), last week injected US$650bn into the world economy to help countries restore liquidity and gain fiscal space to mitigate the devastating impact of the Covid-19 pandemic.
Zimbabwe’s share was US$961m.
“We expect IMF SDRs to improve liquidity and foreign currency challenges and stimulate growth in economies in the markets we operate in,” Seed Co group CEO, Morgan Nzwere said during the company’s annual general meeting held last week.
He said markets like Zimbabwe were affected by foreign currency and liquidity challenges hence the IMF cash injection would help to improve the situation.
The acute shortage of foreign currency in Zimbabwe had forced Seed Co to use forex raised from other markets.
The funding is expected to shore up Zimbabwe’s fragile economy, the Minister of Finance and Economic Development, Mthuli Ncube and the Reserve Bank of Zimbabwe governor, John Mangudya said in a joint statement last week.
Nzwere also said Zambia’s economic prospects were looking positive with renewed confidence with the incoming of the new government. President Hakainde Hichilema was sworn into office last week.
Seed Co registered 99% wheat volume growth, all out of Zambia.
This was off a low base since prior year sales were made in advance towards the close of FY20 due to Covid-19 pre-stocking
Regional business had maize seed sales in Nigeria and Kenya that were 17% lower than prior year due to second season commencement drought in Kenya and lower repeat sales in Nigeria on the back of a very successful prior season and excessive rains in most parts of West Africa).
Vegetable seed sales in Zambia, Tanzania, South Africa, Kenya and Malawi was 15% lower than prior year due to excessive rains in Southern Africa that slowed down vegetable plantings.
On research and development Seed Co products continue to out-perform competitor products in independent trials in our major markets.
Several new products are in the pipeline which includes maize SC419, SC555 and SC659 commercialised Zambia, Tanzania and Kenya, the company said.
SC733 was launched in Zambia, a green mealie product.
The cob rot and tip cover breeding projects have been initiated group wide in response to feedback from farmers, the company said.
Some Seed Co maize hybrids undergoing registration in Cameroon.
Nzwere said rice trials continuing across all markets.
The vegetable seed business segment continuing with the hybridisation agenda in all markets and the income contribution proportion of these high-value products is growing satisfactorily
The expected group wide maize seed production yield (36,600mt) was 15% higher than last season adequate to replenish stocks and satisfy anticipated demand.
The intake of seed from growers and own farms for processing is now at about 40% for maize and about 80% for soya.
Nzwere said out of US$41m in trade receivables at year-end, Seed Co has collected US$22m (54%) to date and collections are continuing.
Total stocks expected at 50,000mt after ongoing processing and these would be more than adequate to satisfy forecast demand in the upcoming selling season
In the outlook, the seed producer will consolidate the growth trajectory leveraging on the strong pan African brand, skills and distribution channels in both existing and new markets whilst mitigating Covid-19 headwinds.
Nzwere said the business is well positioned to defend the growth registered last season anchored on continued government and development partner interventions to ensure food security amidst the pandemic.
Zambia’s new government is yet to spell out its input support programme – it has only promised to do away with middlemen in the procurement chain, he said.
The Malawian government has reduced its Affordable Inputs Programme beneficiaries to 2.7m farmers in the 2021/22 season from 3.5m.
The reduced maize seed order of 17,500mt is still very high compared to 900,000 families (7,000mt) in FY20 going back.
Volumes in Nigeria are expected to come down slightly on the back of an excellent last season and flooding at the beginning of the current season, Nzwere said.
Seed Co said the continued market share growth is expected in its frontier East African markets such as Tanzania and Kenya.
Nzwere said the seed company is closely monitoring security situation in Ethiopia (Tigray war and outstanding federal elections) in anticipation of launching operations.
