Zim faces tough agric seasons

LIVINGSTONE MARUFU

Zimbabwe could face a tough winter and 2022/2023 summer cropping seasons as fear swells the Russa-Ukraine war could affect fertiliser production leading to subdued output and production levels, Business Times can report.

Experts have warned that the government should start looking for new suppliers to avoid shortages, with Belarus being touted as an option.

Russia supplies over 67% of Zimbabwe’s fertiliser requirements.

Before Russia’s invasion of Ukraine on February 24,  local fertiliser prices had more than doubled.

Zimbabwe Commercial Farmers Union president Shadreck Makombe told Business Times that the government should start looking for alternative markets to procure fertiliser.

“Zimbabwe could head towards a disastrous next summer cropping season if the authorities do not address fertiliser issues on time as potential price hikes and supply disruptions could affect its procurement,” Makombe said.

He said Zimbabwe should start importing fertiliser for the summer cropping season when it imports fertiliser for the winter wheat programme. Wheat requires basal and top dressing fertilisers.

Makombe said the government should prepare better for next season, coming from a difficult season.

Zimbabwe requires 600 000 tonnes of fertiliser each season and imports the top dressing fertiliser with basal mainly produced locally.

Zimbabwe Farmers Union secretary general Paul Zakariya said besides the dry spell the fertiliser shortages hindered production.

“When coming out of such a calamitous season, we should go back to the drawing board and correct where we fell short. Fertiliser had serious issues hence we should be better equipped this time to avoid another bad season.

“With the war in source markets, we should begin sourcing somewhere else to avert shortages which could affect our production,” Zakariya said.

Since the war started , local top dressing  fertiliser prices jumped to ZWL$11 600 from ZWL$8500 on February 23.

Fertiliser manufacturers acknowledged that their product is expensive and there has to be a national policy to ensure it is affordable.

ZFC managing director Richard Dafana said top dressing raw materials have skyrocketed on the global market due to the war in Eastern Europe.

“The coming season is worse because prices have gone through the roof, and raw materials are in short supply. Yes we could have a shortage if we do not move adequately to place orders early and provide the necessary foreign currency,” Dafana told Business Times.

“Early orders and proper planning as regards to required financial resources are a must. We could also look at reducing the forex requirement but moving to low analysis fertilizers ( D for cereals as opposed to cereal blend) which have higher local content and so lower forex outlay.”

He said Zimbabwe should develop the local industry and import substitution.

“When Zimbabwe was the bread basket of Africa and won international awards for maize production almost all the fertilisers were locally produced.

“Only specific raw materials like potash which are not locally available were imported. Admittedly there have been significant changes in the fertiliser industry since then and the country cannot go back to that structure overnight but we can try and maximise the local content,” Dafana said.

“This means going back to formulations that maximise the local resources so that we only import what we can’t produce.”

He said there have been some long mooted projects such as local manufacture of ammonia through local gas resources that Zimbabwe should seriously look at.

Some failed because the economic evaluations then were not positive but given recent price changes the situation could have changed, the executive said.

Windmill CEO George Rundogo told this publication the country might witness higher prices and supply chain disruptions due to war in Ukraine.

“Indeed, the events in Eastern Europe will have a direct impact on fertiliser availability and costs going forward as a significant portion of global fertiliser supply has been cut off either directly by the conflict or by the related sanctions imposed on the countries involved.

“The world therefore faces a global shortage of fertiliser. Consequently, fertiliser costs from the major alternative source countries have risen to record levels as demand outstrips supply,” Rundogo said.

He said  enhanced priority could be given to all fertiliser companies to access foreign currency (through letters of credit, direct US$ cash sales through banks and the auction) to secure whatever fertiliser parcels are still available to them in the region as well as contract with external fertiliser raw material suppliers early for summer  of 2022/2023.

“A local currency fertiliser procurement funding facility could be established to avail ZWL$ cash cover for foreign currency purchases by the fertiliser companies as they will need to fund stock piling for many months ahead of the season,” Rundogo said.

“Accelerating current efforts to exploit and completely beneficiate locally available fertiliser natural resources , particularly phosphates used in the manufacture of basal fertilisers as well as gas used in the manufacture of top dressing fertilisers.

He said  fertiliser imports cannot be completely eliminated as some of the key raw materials, such as potash, are not available in the country.

In his article in The Sunday Mail, President Emmerson Mnangagwa acknowledged the price hike disaster caused by the war.

“Given the centrality of Russia and Belarus in production of fertilisers, the pressure will not abate. Across these key commodities of life, prices continue to spike,” Mnangagwa said.

He said the global economy is being buffeted by raging headwinds of pandemics, war and rumours of war.

Mnangagwa said the economy which was on path to recovery and growth, cannot avoid these jolts and bumps.

“Fertilisers, too, have been coming from Eastern Europe. There are many other imports we get from the same regions, in order to grow our economy. We are thus in the direct line of shocks,” he said.