Seed Co projects strong demand
LIVINGSTONE MARUFU
Seed producer, Seed Co Limited, says it foresees stronger demand for seed in the forthcoming summer cropping season buoyed by favourable rainfall patterns.
Seed Co’s managing director, Terrence Chimanya, told Business Times that the company was taking strategic measures to stock all its depots across the country.
“We have stocked all our depots across the country and we are ready for the new summer cropping season. We are happy to announce to the farmers that we have adequate seed supplies,” Chimanya said.
The development comes at a time when farmers under the Presidential Input Scheme have started receiving inputs across the country.
Chimanya said primary food production remained the priority in Zimbabwe and on the continent with various government and development partner interventions to boost food security.
In its trade update for the quarter to June 30, 2022, Seed Co’s sales volumes decreased by 18% from the corresponding period last year.
The decline was largely attributed to a 13% reduction in wheat seed sales due to stringent measures applied on farmer selection by input funders and no repeat early legume and sorghum sales during the quarter under review.
Revenue for the group went up by 36% compared to the prior comparative period on the back of price adjustments to preserve value in view of the general increase in the cost of doing business.
Seed Co swung to profit in the period under review from a loss position in the same period the previous year. This was attributable to margin recovery which however remained under pressure due to official and alternative market exchange rate disparities whose negative effect on the cost of doing business cannot always be sustainably recouped through local currency selling price adjustments, according to Seed Co group secretary Tineyi Chatiza said.
He said, the first quarter was seasonally a cost-accumulation phase in preparation for the main crop, maize and seed-selling season in the second half of the financial year.
Chatiza said global supply shocks from Covid-19 and the Russia-Ukraine war continued to cause supply chain bottlenecks and imported inflation further compounding the woes of the already fragile economy.
The Zimbabwean economic environment remains challenging in the short to medium term.
On the continent, there is mixed optimism with stability in some markets and headwinds in other markets, Seed Co said.
Despite the largely exogenous challenges, the group has adequate stocks both in Zimbabwe and on the continent to contribute meaningfully to primary food production subject to favourable climatic and economic conditions.
Chatiza said Seed Co was taking various measures to harness the real value in the Zimbabwean market where the use of hard currency appears to be dominating transactions.
On the continent, Seed Co International is taking various measures to reclaim the erosion of margins that was experienced in the last financial year.
“The group remains resolute in its mission to leverage its innovative seed solutions, agronomy services and strong brand, working with all stakeholders, to contribute to food security and plug global supply chain gaps,” Chatiza said.
