eBusiness Weekly
Kudzanai Sharara
United Refineries Limited, one of the country’s largest producers of cooking oil, is looking at partnering eligible farmers in the production of soya bean.
In a scheme named, Soya Bean Outgrowers Alliance, United Refineries Limited (URL) will assist eligible farmers with a letter of guaranteed uptake plus help to access finances from banks on a case by case basis.
Soya bean is the major raw material used in expressing cooking oil and is also used to produce stock feeds, soya chunks, flour, milk among other products.
To be eligible, farmers must have at least 10 hectares to grow the crop.
The move by URL comes at a time the country’s soya bean production has not been enough to meet industry demand. The early crop assessment report issued by the Ministry of Lands, Agriculture and Rural Settlement on May 9, 2018, shows that the country produced only 60 000 tonnes of soya beans, against national requirements of 240 000 tonnes in terms of demand and 400 000 tonnes of installed capacity.
Some of the bigger players in the cooking oil sector are ZimGold Cooking Oil, Surface Wilmar Zimbabwe, Olivine and Pure Oil Industries.
With GMB currently paying $780 per tonne against $500 import parity, industry players believe this is the time to boost production.
Responding to Business Weekly, URL chief executive officer Busisa Moyo, said the company had decided to support farmers as a way of boosting supplies.
“It’s about accessing enough soya for our factory, it requires 72 000 tonnes per year,” said Moyo.
This means what the country is producing cannot even meet the requirements of one company in the cooking oil manufacturing sector.
Local players have had to supplement local production with imports, but foreign currency shortages often leave them in a pickle.
The country is going through one of its worst foreign currency shortages that has seen some local producers resorting to buying foreign currency on the black market where they have to pay premiums of more than 50 percent.
Oil expressers have, however, to a greater extent, managed to get some foreign currency from official channels as the authorities, through the central bank make efforts to avert shortages. This is, however, not sustainable as it puts strain on an already burdened foreign currency payment backlog.
In 2017, the import bill for soya bean amounted to $172 million. According to the Reserve Bank of Zimbabwe crude oil and other imports related to cooking oil gobbled $300 million last year.
This is the reason URL has taken the initiative to form an “alliance” with farmers in an effort to boost production.
Success of such a scheme, according to Moyo, will result in the company increasing its capacity utilisation on soya bean processing to above 60 percent from 10 percent currently.
Moyo believes, if all players come together, the initiative will go beyond boosting URL’s capacity utilization, but will help the whole value chain.
“To strengthen the value chain, banks, input suppliers, Expressers and stock feed manufacturers need to come together,” Moyo said.
“We are not lending or giving money, the banks will assess and on lend. We will facilitate and support with an off-take agreement.
For a country whose economy, according to President Mnangagwa, is predicated on agriculture, and has some of the best arable land, it should be at least food sufficient. But lack of farmers’ education could be one of the reasons why crops like soya bean have not found favour with farmers.
Moyo says lack of farmer education on the benefits of introducing legumes, crop rotation and lack of irrigation infrastructure are some of the reasons why production has not taken off to required levels.
To help with some form of education, URL will also be hosting groups to show them and demonstrate the impact of soya on human and animal life.
“Farmers are also not aware that GMB will buy all soya at $780 supported by treasury and the Oil Expressers Association (OEAZ),” Moyo added.
