To our valued clients,

As we look back at 2020, not many of us would have predicted the events that we have all had to deal with in one way or another during the year past.

On an international level, Covid- 19 brought a scale of global concern and travel lockdowns not seen in recent history, on a regional level Southern Africa grappled with one of the worst droughts in 40 years and on a domestic level we saw chronic food shortage, spiraling inflation and a tightening of the financial sector as a mechanism to try to quell the latter.

Not an easy mix of real difficulties for anyone to deal with, regardless of where you are on the value chain, primary producer through to final consumer.

To focus in on the Agriculture sector, as all our Group affiliates deal within this part of the Zimbabwean economy, whether in the contract farming, grain trading, grain drying and storage, fertilizer blending & manufacturing or collateral management spaces. It has proved a challenge to maintain the scale we have rebuilt in recent years, given the effects of the drought and limited access to productive sector loans. This has meant we’ve had to adapt the way we deploy capital, the means of that capital and the horizon on that funding. Whilst it has not been a simple task, it has given us an opportunity to look at the group and improve wherever possible.

Thankfully we can look back on a year that we and our clients, both farmers and the processors, have survived through and can look ahead to hopefully more favorable winds in 2021.

In reality, our country has limited stocks of the grain and oilseed that we involve ourselves in promoting the growth and marketing of, pre- and post-harvest, being Maize, Soybean and Wheat. Albeit that reports of significant deliveries of the Wheat in this last Quarter of 2020 may result in limited requirements for imports for the first half of next year if stocks are released to the millers on time. Prices have remained subdued on a 5 year average on a USD$ basis for the majority of 2020, with a rally now being seen in Q4, even though the fundamentals behind the supply and demand availability do not support the spike especially with a strong ZAR : USD exchange rate and fairly large carry overs to our North and South. It appears this short term “Bull” is being supported by our domestic shortages, strains on the borders and logistics delays as well as trade policy in some of our neighboring countries.

Given the above it would be prudent for holders of commodity to short / sell, or to process out of those stocks during the course of Q1 2021 prior to what looks like a decent summer harvest coming through, should all the lands reported as having been sown make it to market. A larger summer harvest will put strain on buyers ability to meet payment demands, this will lead to downward “Bear” pressures on the spot market at peak harvest and a possible seasonal commodity price dip that market has begun to trend around these past few years.

The best way for a Farmer or a Processor to navigate the way ahead and achieve their respective ambitions is to refer to your Staywell Broker who will be able to match your need to sell or buy with the requisite price or volume and quality you may be looking for, or guide you accordingly.

On an exciting note, there a few positives we can look forward to, firstly, the favorable weather outlook should translate into our dams being replenished and the opportunity to establish a good winter Wheat crop in May 2021. This will reduce pressure on the fiscus to import the deficits we’ve become accustomed too and at the same time reduce food price inflation in the bread and confectionary sectors.

Secondly, and this is something that we are particularly excited about, the Origen group is participating in a pilot warehouse receipting process that once perfected will allow our farmers and anyone else holding grain as a store of wealth to assign this stock into a tradable / collateralizable receipt that is highly fungible and should prove a very desirable form a security with the financial sector. We believe this will improve access to capital in the Agriculture sector, capacitate our farmers to increase and improve on farm operations and take another step towards domestic food security and the medium-term national ambition of grain export status.

The year ahead will no doubt also throw the unforeseen at us again, the way to best prepare for this, is as always to predict it will happen. One thing that we can assure you of as our business partners is that Staywell will be there to guide, assist and facilitate a solution wherever possible, for it is in your growth, that we find our own. In a commitment to growing.

In closing we wish you and your loved ones a Merry Christmas and a festive New Year, we look forward to working together in 2021, may God bless you all.

As a reminder our Brokers are a call away on:

Percy Mudzamba –    0772 235 558

Marshal Ruzvidzo –   0773 502 799

Richard Robbie –         0772 324 309