HARARE – The Commercial Farmers Union (CFU) says lack of foreign currency currently affecting the production of fertiliser at Sables Chemicals may result in serious shortages of fertiliser during the 2018/19 agricultural season.
Last year, government allocated $130 million to the industry for the importation of fertilisers and raw materials.
The main fertiliser manufacturer Sable Chemicals received $2 million from the $130 million allocated to the sector.
In a report circulated at its recent congress, the CFU said the lack of foreign currency had strained Sable Chemicals’ operations, such that between January and July 2018 it produced 27 000 tonnes of ammonium nitrate, against a target of 50 000 tonnes.
“There is likely to be a serious shortage of both ammonium nitrate fertiliser and Compound D this season if the foreign currency situation does not improve,” CFU said.
The fertiliser manufacturer has an installed capacity of 240 000 tonnes per annum, enough to cater for local demand and exports.
Depending on the quality of the agricultural season, the country’s requirements are generally pegged at 180 000 tonnes of ammonium nitrate per year.
“The local fertiliser industry continues to struggle mainly due competition from imports, liquidity crisis, poor production history of farmers and high cost of production which affect viability,” CFU said.
Several challenges ranging from chronic cash shortages, multi-tier pricing, foreign currency shortages and termination of some services that require foreign currency have affected agricultural service providers.
Ammonium nitrate fertiliser is currently priced at $740 per tonne while Compound D is priced at $700 per tonne.
Besides the fertiliser producers, the crop chemical sector is also facing a foreign currency crisis.
“Most crop chemical suppliers rely heavily on imported products.
“Most crop chemical suppliers import their products and they have been finding it difficult to meet demand as they always fall short of the much needed foreign currency.
“However, uptake is very low because the chemicals are expensive and some farmers cannot afford them.
“Twenty litres of Paraquat is being sold at $340 compared to $85,50 in 2017,” CFU said. – The Financial Gazette