THE delayed onset of the rainy season late last year prompted an increase in small grains demand, listed seed producer SeedCo Limited has revealed.
Over the years, Zimbabwe has had to import maize, a staple food, for the past several years as the country struggles to produce enough to feed its population due to frequent droughts and erratic rainfall, which has led to poor harvests and chronic food insecurity.
The government has tried to wean Zimbabweans off maize in arid parts of the country, encouraging them instead to grow traditional small grains like sorghum and millet, which are drought-resistant.
Presenting a trading update for the third quarter ended December 31 2024, SeedCo Group Secretary Tineyi Chatiza revealed that small grains had a huge demand in the just ended quarter.
“From an operational perspective, the delayed rains this season led to increased demand for small grains and legumes, extending into the last quarter of the financial year in Zimbabwe and neighboring countries.
“This demand for small grains holds significant potential to clawback annual sales volume performance not only in Zimbabwe but also in neighboring countries,” he said.
During the period, revenue of ZW$39,9 billion signifying a 443% increase. An operating profit of ZW$18,6 billion was derived which is 415% higher than the comparative period.
The said the increase in revenue, whether assessed historically or adjusted for inflation, aligns with increasing proportion of US$ denominated sales against the pronounced depreciation of the exchange rate and the resulting inflationary impacts.
The enhanced profitability outcome can be credited to the restoration of profit margins and the alignment of the exchange rate with open market forces experienced in the better part of the first half.
“It is imperative to emphasize that the comparability of financial performance is considerably affected by the volatility in exchange rates and the transition in the base of inflation statistics from the local currency to a combination of currencies,” said Chatiza.