Agribusiness firm, Ariston Holdings Limited, has bemoaned the operating environment in Zimbabwe, citing the Reserve Bank of Zimbabwe’s 25% export retention worsened by the disparity between the interbank rate and the fair market rate used by suppliers.
In its trading update for the 1st quarter ended December 31, 2023, Ariston also cited low rainfall due to El Nino-induced climate conditions.
“For the period to mid-December 2023, rainfall was below the average year to date and was accompanied by extremely hot weather on all estates. This was not a good start to the season. Thereafter, the weather improved with year-to-date rainfall now exceeding the prior year rainfall,” the company said.
“The economic environment continued to be challenging, especially so for exporting agricultural businesses as the 25% RB2 Export retention coupled with the significant disparity between the Interbank rate and the fair market rate used by suppliers became very significant. This disparity is making some export lines unviable due to loss of value on the 25% RBZ retention. It is hoped that the authorities will implement positive policies that will support the growth of exporting businesses.”
The Zimbabwe Stock Exchange listed company further noted that the local environment continued to be characterised by further dollarisation of the economy, increasing inflationary pressure and liquidity challenges.
On business performance, Ariston said the current year saw tea production volume at 716 tonnes, showing 2% increase when compared to 700 tonnes achieved in the prior comparative period.
“Revenue generated in the current period was US$1 037 724 compared to US$987 135 achieved in the prior comparative period. This represented a 5% increase in revenue, mainly attributable to sales of macadamia stocks, which were carried over from the prior comparative period coupled with an increase in tea sales volumes,” the group said.
Ariston said the 2023/2024 agricultural season is expected to receive lower than normal rainfall. Because of this, the Group plans to mitigate the impact of low rainfall through heavy reliance on its irrigation systems.
“Early indication is that demand for macadamia nuts will be firm. However, it is still too early to have a view on the market prices, although sales of our early drap nuts have been at an improved price compared to prior years for similar quality
“The operating environment is expected to continue to be challenging. Focus will remain on product quality and production processes.”