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Stockfeed producers in record 2021 output

Business Digest
The SMA’s 2021 performance report said Zimbabwe’s stockfeed industry recorded 25% annual growth in output from the drought-induced depressed output of 2020.

MTHANDAZO NYONI ZIMBABWE’S stockfeed manufacturing industry produced 657 000 metric tonnes (MT) of stockfeed valued at ZW$43,53 billion (US$538 million) in 2021, setting a new national output record, a report from the Stockfeed Manufacturers Association (SMA), showed this week.

The SMA’s 2021 performance report said Zimbabwe’s stockfeed industry recorded 25% annual growth in output from the drought-induced depressed output of 2020.

Growth in the stockfeed industry was driven by the impressive recovery of the domestic poultry and pork breeding sector, the report indicated.

In 2021, stockfeed output from SMA members accounted for 68% of the national market.

“For the stockfeed manufacturing, maize and soybeans continue to be the major raw materials accounting for 73% and 80% of tonnage raw materials. In 2021, the stockfeed industry utilised a total of 187 000 MT of soybean and soymeal, almost all of which was imported at a cost of US$81 million or US$458 per MT,” the report reads in part.

The report noted that the industry, in the period under review, procured 323 218 MT of maize, with only 95 216 MT being imported in the first quarter of 2021.

For the rest of the year, the Grain Marketing Board (GMB) was able to satisfy monthly commercial demand for maize from the stockfeed and livestock industry.

“Despite some supply chain logistics challenges and bureaucratic cost of submitting monthly stock reconciliations before GMB approval of new sales orders from established regular customers, the stability of maize supplies from GMB at subsidised prices provided a much needed economic stimulus which enabled the stockfeed industry to post very impressive growth in 2021,” the report reads.

Following government approval of GMB minimum maize producer and wholesale price at ZW$32 000 (US$88) in April 2021, SMA said the stockfeed industry enjoyed stability in wholesale maize price throughout the year ending December 31, 2021.

During the same period, the domestic currency depreciated progressively from ZW$85 in April to ZW$106 in December 2021 at the official weekly forex auction market.

The parallel market exchange rate rose from ZW$130 to ZW$200 over the same period.

“Thus, GMB wholesale maize price was 65% and 15% higher than the landed price of maize imports from Zambia in June and December 2021 respectively. High domestic cost of maize undermines the competitiveness of Zimbabwe’s livestock industry and animal proteins (poultry meat, table eggs, pork, feedlot super grade beef, dairy milk, rabbit, fish) against imports,” it said.

“To restore regional competitiveness of livestock proteins, Zimbabwe has to increase average maize yield per hectare and reduce average cost per tonne to regional parity.”

“The strict enforcement of Statutory Instrument 145 of 2019 effectively granted GMB a monopoly in buying and selling maize from uncontracted farmers resulting in the unintended escalation of the cost of maize due to the double transportation problem undermining marketing efficiency.”

The association said the stockfeed industry hopes that the Agriculture ministry will revisit the matter in line with Pillar 5 of National Agricultural Transformation Strategy which anticipated the potential conflict between strategic grain reserves goals and marketing efficiency considerations of the private sector.