eBusiness Weekly
Business Writer
Hybrid seed processor, Seed Co Limited, says it is striving and confident of its efforts to ensure it is sufficiently funded and stocked to meet the demand for food crop seeds in both the winter and upcoming summer planting seasons.
The firm commands a significant market share in the seed business both in the country and in the region.
In a trading update for the first quarter to June 30, 2023, Seed Co said seed sales volumes had already experienced a 10 percent growth compared to the same period in the previous year.
This comes as the Government has put in place various measures and initiatives expected to boost the agriculture sector.
Growth for the sector is projected at 9,7 percent during 2023, and is expected to remain strong at 3,3 percent during 2024, benefiting from continued targeted state support for the vulnerable households under the various Government supported programmes such as Pfumvudza/Intwasa, complemented by increasing participation of the private sector in the production of agricultural output.
For Seed Co, sales of wheat constituted 85 percent of the overall volume, a pattern consistent with the period under review, reads part of the trading update.
“The volume growth was primarily propelled by a 7 percent and 19 percent surge in the sales of wheat and barley seeds, respectively.”
The increased sales, according to the update, “are attributable to enhanced dam water levels and improved electricity availability for irrigation purposes”.
This season, farmers have planted wheat on 86 000 hectares up from 85 000 hectares last year.
Sales are, however, expected to be much improved in the second quarter as the first quarter usually serves as a phase of cost accumulation in anticipation of the primary crop, maize, seed sales season in the latter part of the fiscal year.
Seed Co said while revenue grew by 648 percent and 305 percent when compared to the same period in the prior year in historical and inflation-adjusted terms, it was mainly because of the sharp depreciation of the exchange rate and the consequent inflationary effects.
The local currency depreciated from $928/US$1 to $5 739 per greenback during the quarter under review.
However, in contrast to prior year, the operating profit showed a positive swing of 10 times and 19 times when compared to the previous period’s inflation-adjusted loss and historical profit, respectively.
“The improved profitability outturn is attributed to the recovery of profit margins and the alignment of the exchange rate with open market forces,” reads part of the trading update.
Looking at prospects, amid the looming El Nino, Seed Co said its production and processing plans have been strategically planned to accumulate an ideal mix of seed stock varieties.
El Nino is associated with below normal to normal rainfall and Zimbabwe is expected to experience the phenomenon from the start of the season till February 2024.
