20100904
africanews

Maputo — Despite the Mozambican government's drive to increase wheat production, the country still only produces enough wheat to meet five per cent of its annual consumption, according to Agriculture Minister Soares Nhaca.

Speaking on Saturday on the Radio Mozambique programme "Linha Directa" (Direct Line), Nhaca said that currently the country consumes 437,000 tonnes of wheat a year, but only produces 22,000 tonnes - in other words, there is a wheat deficit of over 400,000 tonnes.

These figures suggest that it is impossible to meet the targets laid down in 2008 in the government's National Food Production Plan. These included cutting wheat imports by 50 per cent, and eliminating rice imports by 2011. There is only one agricultural campaign left in which to meet these ambitious goals.

As for rice, Nhaca put national production at 257,000 tonnes a year. But annual rice consumption is more than double this, at 527,000 tonnes.

Mozambique could, in theory, be self-sufficient in key vegetables such as tomatoes and onions - but currently it is still heavily dependent on imports. Currently Mozambique produces 185,000 tonnes of tomato a year, but consumes 276,000 tonnes - a deficit of 91,000 tonnes. For onions, the shortfall is 62,000 tonnes - the country consumes 130,000 tonnes of onions a year, but only produces 68,000 tonnes.

To fill the gap, the country resorts to imports which mostly come from South Africa. These imports have become much more expensive because of the strengthening of the South African currency, the rand. Two years ago, one rand was worth 2.5 meticais - today you need slightly more than five meticais to purchase one rand.

Mozambique produces more than it consumes of three basic foodstuffs - maize, cassava and sugar. "We are managing to produce more than we need of these goods", said Nhaca.

Given the small size of the Mozambican wheat harvest, it is international wheat prices that determine the price of wheat flour in Mozambique, and hence the price of bread. The FOB price of wheat was relatively stable throughout 2009 - but rose from 219 US dollars a tonne in January 2010 to 295 dollars a tonne in August, an increase of 34.7 per cent.

Matters are made worse for Mozambique by the depreciation of the metical against the US dollar. In March, there were about 28 meticais to the US dollar, but the average exchange rate cited by the Bank of Mozambique now is 36.5 meticais to the dollar - a depreciation in five months of over 30 per cent.

There are several factors at work to increase the world price of wheat. Perhaps the most serious are the devastating fires in Russia, which forced the Russian government to suspend all wheat exports.

The international developments brought to an end a period of stability in the prices charged for wheat flour by Mozambican milling companies. From early July to the end of August the price of a 50 kilo sack of flour rose from 850 to 1,050 meticais - an increase of 32 per cent in less than two months.

The price of a standard loaf of bread has been stable at five or 5.5 meticais (depending on the bakery) between 2007 and August 2009. The Bakers' Association decided, at a meeting on 2 August, that the price of a loaf should rise by one metical. This decision was to have taken effect on 1 September - and doubtless contributed to the riots that broke out in Maputo that day.

The government points out that it has cushioned consumers against rising wheat prices by eliminating the 2.5 per cent customs duties on imported wheat, and exempting wheat flour and bread from Value Added Tax (VAT).