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Sifelani Tsiko Agric, Environment & Innovations Editor

Seed producer, Seed Co Zimbabwe recorded an 8 percent revenue drop as volumes declined by 20 percent due to late rains and pricing distortions on the market for the full year results to March 2022.

According to a statement released on Tuesday, Seed Co Zimbabwe posted a ZWL$0.6 billion inflation adjusted profit before tax for the full year results to March 2022, a significant reduction from prior year’s ZWL$1.9 billion.

The seed producer recorded a monetary loss decline from ZW$3.3 billion to ZWL$1 billion due to erratic rains, adverse currency movement and pricing constraints on the market.

Seed Co Group chief executive Morgan Nzwere told an analysts briefing that the difficult and unstable macro-economic environment characterised by hyperinflation, currency erosion and pricing distortions had affected the overall performance of the seed company.

He said the monetary and fiscal regulations set by the government had compounded operations for the company which struggled with exchange rate disparities affecting the ease of doing business viably.

“Global supply shocks from Covid and now the Ukraine war are causing shortages and inflation that is compounding the woes of already fragile African economies,” Nzwere said.

“Zimbabwe’s economic situation remains fragile and volatile. The gap between the official and alternative exchange rates in Zimbabwe is set to continue weighing down real profitability as it is not easy to de-link selling prices from official rates given the sensitivities around staple seeds in the country.”

Margins for the seed producer shrunk from 64 percent down to 33 percent due to price distortions in the economy.

This also sliced off earnings by Seed Co International.

Seed Co International after-tax profits declined to US$7,1 million in full year results to March 2022 from US$11,1 million in the previous period last year due to erratic rains, adverse currency movement and reduced economies of scale lower volumes.

Maize remains the flagship seed crop contributing 53 percent of the volume despite dropping by 23 percent due to price distortions and late rains that affected planting in the 2021 -2022 cropping season.

Wheat sales dropped by 6 percent and soybeans volume dropped 31 percent because of erratic rains and pricing challenges.

Barley was stable, beans increased nearly four times driven by exports to Mozambique while sorghum was also affected by erratic rains.

“Zimbabwe and continental food security will however remain top of the agenda to mitigate global supply shocks as African governments activate import substitution local production strategies,” Nzwere said.

“The group is better positioned to leverage the strong brand and intellectual property to actively contribute to primary food production to plug supply gaps.”

He said Seed Co Zimbabwe was working flat out to preserve value through a number of strategies that included taking advantage of the good opening stocks, early processing as a result of investments made on an artificial dryer as well as expanding markets to create sustainable business.

In addition, Seed Co Zimbabwe will open its own selling depots for direct cash sales and renegotiate distribution agreements to ensure the firm earns and collects real value from the sale of its products.

The seed producer said it will also leverage on winter cereal sales with hard currency denominated revenue and continental associates to exploit export opportunities.