The Grain Marketing Board recently announced that they have increased the producer price of grains to $4 000 up from $2 100 per tonne. The covered grains include maize (Zimbabwe’s staple grain), rapoko, sorghum and millet.
This was revealed by the GMB’s CEO in a conversation with the Chronicle:
The Grain Marketing Board (GMB) advises that the Government increased the producer prices for maize and traditional grains namely sorghum, millet and rapoko to $4 000 up from $2 100. GMB is encouraging farmers who still have grain to take advantage of the new price and urgently deliver their crop to their nearest depot.GMB CEO Rockie Mutenha
This is more than what the black market is paying
According to the law, farmers have to sell their surplus grain to the GMB and not directly to customers. It’s a rule that a lot of farmers have routinely ignored preferring to sell to the black market and their neighbours instead.
Currently, a bucket of maize is going for $38-$40 bond in Harare. Generally there are 3 buckets within a 50kg sack which means farmers are getting:
$40 x 3 x 20
$2 400 bond.
If we multiply this by the current cash premium rate of 45% given the fact that bonds and RTGS (which the GMB pays are not equal). This gives:
1.45 x 2 400
$3 480 RTGS
That is over $620 less than what the GMB is offering.
People will still prefer the black market
Even with these prices expect two things to happen. First, the black market price will rise somewhat, in response the this, it is unlikely to match the GMB price at least in the short term. Secondly, farmers, especially small scale farmers, will still prefer the black market.
Why? Well the GMB is notorious for its delayed payments. They might be paying more now but when you do get your payment, by which time donkeys would have grown horns, the black market will be paying more than you will get. Hopefully, the government will work on this issue.
Mealie-meal prices will go up again
Expect the GMB to pass these prices to millers, if that does happen the price of mealie-meal will go up again. Millers will have no choice but to pass on the price. Expect the price of 10 kg to reach close to $100