THE Agricultural Marketing Authority intends to raise $55 million through the floatation of bills to buy grain produced during the 2013 /14 season, the authority said in a statement.
The AMA Bills, which have a one year tenure, will yield an annual interest of 10,5 percent. The offer opened yesterday and CBZ Bank is administering the offering.
“AMA intends to issue bills to finance the purchase of grain for this current marketing season and CBZ hereby invites investors including but not limited to pension and provident funds, insurance companies, life mutuals, commercial banks and other interested institutions as well as individuals in Zimbabwe to subscribe for the AMA bills,” said AMA.
The paper has a Government guarantee and special features – prescribed assets status, liquid asset status and tax exemption status.
In April this year AMA announced its intention to raise funds through issuance of bills to raise funds for the Grain Marketing Board to pay maize farmers and rehabilitate silos. However, the projected marketable surplus of maize based on the results of the current crop forecasts for the 2014-2015 is 250 000 tonnes and liquidity issues continued to hamper GMB‘s progress in the market.
Applications must be for a minimum of $50 000 and in multiple of $10 000 thereafter. It is estimated that maize purchases will require $100 million and the Government has made a provision for this amount in the budget.
Cognisant of the tight fiscal position and the imperative to pay farmers timeously, the GMB approached AMA to raise sufficient resources in the market through bills.
The funds raised will be used by GMB to purchase sufficient grain bags, bitumised tarpaulins and to rehabilitate silos to ensure optimum grain storage capacity. The refurbishments of the silos will ensure that the GMB will have available bulk storage capacity of 427 700 tonnes which is more than the 250 000 tonnes of maize that GMB is targeting to purchase from the local market in the 2014-2015 season.
The 2013-2014 season’s maize intake was 47 917 tonnes, which is 59 percent lower than the maize delivered during the 2012-2013 marketing season which was 131 432 tonnes.
During the 2013-2014 marketing season, GMB faced several challenges that included shortage of grain storage bags, poor storage infrastructure and transport logistics. The GMB also experienced very limited liquidity compounded by delays in receipts from Treasury.
Cumulative maize deliveries in the year to March 2014 amounted to 33 273 tonnes while small grains amounted to 395 tonnes. Total maize and small grains deliveries were valued at $12,6 million.
Cumulative payments for maize and small grains for 2013-2014 marketing season amounted to $11,9 million.