Winter wheat price pegged at US$520 per tonne

04 Oct, 2023 - 00:10 0 Views
Winter wheat price pegged at US$520 per tonne Wheat

eBusiness Weekly

Business Writer/NewZiana

The Zimbabwe Government has pegged the marketing price for winter wheat at US$520.25 per tonne, 75 percent of which will be paid in United States dollar and 25 percent in the local currency.

Lands, Agriculture, Fisheries, Water and Rural Development Minister Dr Anxious Masuka said the marketing price is consistent with achieving both food and nutrition security and macro-economic stability.

He said the price determination is based on approved pricing policy which uses a standardised maize production model, cost-plus pricing model, an average yield level of 4.8 tonnes per hectare, and a 15
percent margin above break-even price.

“Submissions from various stakeholders were also taken into consideration. From the model, the total cost of producing a hectare of wheat is US$2 090.04 and the breakeven price is US$452.39,” said Dr
Masuka, adding that the model uses a yield assumption of 4.6 tonnes per hectare.

Dr Masuka said that 15 percent rate of return, at a yield level of 4.62 tonnes per hectare, the recommended and proposed 2023 marketing season price of wheat is US$520.25 per tonne, with the import parity price for the commodity ranging from US$344 to US$462 per tonne.

When coming up with the planning, marketing and pricing system, Masuka said Government took note of the four categories of the farmers such as those financed under the climate proofed Presidential Input Scheme (Pfumvudza/Intwasa), self-financed farmers, National Enhanced Agriculture Productivity Scheme (NEAPS) financed farmers supported by the Agriculture Finance Corporation (AFC) and Commercial Bank of Zimbabwe (CBZ) as well as those financed by private contractors.

The Grain Marketing Board (GMB) will purchase all wheat financed under  the Presidential Input Programme as well as self-financed farmers will be the buyer of last resort, he said, adding contractors may arrange to sell their crops to the GMB.

“All contractors including the Food Crop Contractors Association (FCCA), Commercial Bank of Zimbabwe (CBZ), Agriculture Finance Corporation (AFC) are obligated to buy back contracted wheat at market prices,” said Dr Masuka.

He said self-financed farmers will sell to the best advantage on the market or to GMB, which will provide commercial warehouse receipt services to all players.

Dr Masuka said the Zimbabwe Mercantile Exchange (ZMX) will provide a central warehouse receipt system and spot market trading platform for agricultural commodities.

“Government is issuing a Statutory Instrument that mandates private players to provide returns on storage of grains to be able to track national stock of wheat,” he said.

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