National Foods, the country’s biggest food producer, says Zimbabwe’s record 2022 wheat harvest is helping to soften the impact that high global prices of the grain have had on the price of bread.
Natfoods, a division of Innscor Africa, was the biggest private investor into wheat growing last season, and the company says it will extend its funding to growers this year.
The company saw overall volumes down 9% in the half-year to December, after wheat price shocks hit volumes of flour and related products. The flour unit alone suffered a 20% drop in volumes, as imported wheat rose to as high as US$600 per metric tonne, well above normal levels of US$400-450/MT.
This saw bread rising above the key US$1 per loaf price point, making it too expensive for many consumers. However, prices eased marginally due to a record local harvest of Zimbabwean wheat, which is blended with imported wheat to make bread.
“The bakery division saw volumes recover in the second quarter as the substantial local wheat crop allowed for more affordable loaf pricing; as a result, six-month loaf volumes closed at consistent levels to the comparative period,” Innscor says.
According to Natfoods, despite the improvement, volumes are unlikely to recover fully in this half of the year.
“Heading into the second half, wheat prices have declined somewhat but remain at elevated levels. Accordingly, we see a partial but not full recovery of volumes in the second half,” the company says.
Zimbabwe produced the largest wheat crop on record last year, benefitting from expanded irrigation and private investment for new wheat farmers. National Foods was the largest private investor in wheat output last year, through its agriculture unit PHI.
“The group intends to replicate the successes of the 2022 wheat crop, where it produced 78,000 tonnes of wheat, representing the largest private contribution to the national wheat harvest,” says Innscor.
In April, Innscor expects to commission its new US$22 million fully automated bakery in Bulawayo, which it hopes will help push sales. A new flour mill at Natfoods’ Bulawayo site, also expected to be completed this month, will increase wheat milling capacity by an additional 2,000 MT per month.