Six milling companies in Zimbabwe were forced to suspend operations on Sept. 13 due to the government’s failure to pay for wheat that is held up in Mozambique, according to Tafadzwa Musarrara, chairperson of the Grain Millers Association of Zimbabwe (GMAZ), who spoke with reporters on Thursday.
He said the Reserve Bank of Zimbabwe had made an initial payment of $5 million to the wheat supplier Holbud Limited, which left a balance of more than $7 million. He said the balance is expected to be paid off Friday, Sept. 14.
He said the six companies that have temporarily suspended operations are: Victoria Foods, Uni Foods, Wheat Star, Power Foods, Falcon Foods and Oriental Milling.
Zimbabwe is experiencing bread shortages due to the short supply of wheat. GMAZ recently warned that shortages could occur because of the government’s failure to pay on time.
Musarara told reporters that, if the Reserve Bank pays the supplier on Sept. 14 as they are expected to, the milling companies that currently possess wheat will loan the grain to those without it and get repaid as soon as the remaining shipments from Mozambique arrive.
He noted that since local wheat is used primarily to produce flour for biscuit production, Zimbabwe millers are dependent on imported wheat to make flour for bread-making.
In July, to avoid artificial shortages of bread and other flour-related products in Zimbabwe, GMAZ began scouting and supplying flour to small-scale bakers throughout the country.
At that time, GMAZ said there was panic buying of flour-related products by members of the public who were speculating on price hikes.
According to the GMAZ, Zimbabwe needs at least 400,000 tonnes of wheat per year to meet its demand of about 950,000 loaves of bread per day. Government statistics indicate annual production capacity stands at 200,000 tonnes, leaving a shortfall of 200,000 tonnes, the GMAZ said.