Zimbabwe's economic remains strained: Seed Co

Nyashadzashe Ndoro

Chief Reporter

Zimbabwe's economic environment remains strained, weighed down by fiscal challenges, the aftermath of the El Nino-induced drought, tight monetary policy, and external economic pressures, Seed Co Limited has noted.

In its trading update for the first quarter ended June 30, 2024, the Zimbabwe Stock Exchange listed seed producer noted fiscal challenges, effects of the recent El Nino induced drought, a tight monetary policy and external economic pressures as challenges facing the economy.

"Zimbabwe's economic environment remains strained by fiscal challenges, exacerbated by the adverse effects of the recent El Nino Induced drought, a tight monetary policy aimed at stabilising the newly introduced Zimbabwe Gold currency, and external economic pressures. These factors create a challenging business cilmate," Tineyi Chatiza Seed Co Limited's Group Secretary noted.

The company has, however, reported a 15% increase in total seed sales for the first quarter ended June 30, 2024, compared to the same period last year.

The company's strong performance is attributed to robust local winter maize sales and exports, with wheat and barley volumes consistent with the previous year. This uptick in sales has resulted in a rise in revenue and operating profit, aligning with the volume performance.

Despite the challenging business climate, Seed Co Limited said it is well-positioned for recovery in the upcoming season, supported by substantial seed stock carried over from the previous season.

The company has also adopted the United States Dollar as both its functional and reporting currency, effective April 1, 2024

"It is important to recognise that exchange rate distortions and the group's switch to reporting in USD starting this financial year significantly affect the comparability of financial performance," the company noted.

Looking ahead, Seed Co Limited said it is optimistic about the upcoming season, forecasting good rainfall and strong demand for its seed stock from both local and export markets.