Fertilizer producer, Nufert says despite having a strong maize contractors’ book this year, delays in foreign currency payments from the auction system by the Reserve Bank of Zimbabwe has negatively affected timeous allocation of resources.
Nufert, has strong synergies with its sister-company StayWell which contracts farmers for grain production. The two companies are subsidiaries of Origen Corporation which has been one of the major players on the local agro-industrial sector since the 1990s.
However, due to delays in foreign currency allocation for winning bidders at the auction system, the company struggled to support its out growers at the onset of the farming season last year.
The auction system has been inefficient in availing foreign currency to local companies due to systematic weaknesses.
“It’s a very tough environment for all of us. I think the toughest things as a fertilizer manufacturer is the availability of foreign currency supply. We really have been struggling to get foreign currency through foreign trading system and last year it was difficult to support farmers,” said Nufert managing director, Anton Brown.
Nufert brings in substantial quantities of straights fertilizer, which are used for blending at their plant at 600 Seeds in Mt Hampden. It services a wide variety of wholesale clients such as the tobacco industry, tea, sugar, grains and oil-seeds (through Staywell contract schemes), potatoes and other crops.
The company currently produces 300 tonnes of fertilizer per day at its Mt Hampden plant.
However, to cover the foreign currency gap, the company says it has approached some local banks for it to be able to access funds to procure raw materials in time for the upcoming winter farming and summer seasons.
“This year we are working with banks and on Letters of Credit (LCs) basis. The response has been positive and we are hoping we can bring more raw materials on time for the farmers to plant in winter and for maize later in the year,” said Brown.
However, analysts are critical of the high interest rates on the market which have a multiplier effect in terms of cost.
Recently, the RBZ maintained interest rates at 60 percent as part of measures to keep money supply within non-inflationary levels.
