Reserve Bank of Zimbabwe indicates that annual milk production in Zimbabwe has risen 18% from 17.8m litres in 2017 to 21m litres in 2018. Estimates of output from the informal sector also indicate that informal output increased by 7% in Q4 2018.
The 2018-2022 strategic plan for the Zimbabwe Association of Dairy Farmers (ZADF) aims to raise production levels to 130m litres annually by 2022. On its current trajectory, production would reach 34m litres by 2022 – almost double capacity in 2017. Given the impact of the currency crisis on imports, input costs and foreign investment, even this target looks doubtful.
The growth in milk production equates to a rise in per capita consumption of domestic milk from 1.04 litres to 1.20 litres. Fresh milk output rose by 13.6% in 2018 compared to the 2017 output levels. The Zimbabwean government has made investment in the dairy industry a key target. Zimbabwe currently imports milk from South Africa – meaning the country also has to commit valuable foreign currency to purchasing milk.
The news comes in the same week that Dairibord Zimbabwe Ltd (DZL), Zimbabwe’s largest milk processor, reported 125% growth in revenues for the five months to the end of May 2019. Volumes sold increased 8% while the selling price rose by 95%, resulting in an average increase of $0.62c per litre.
Exports have also grown by four times, from $500,000 to $2.1m. As we have noted, Dairibord, which owns 60% of Malawi Dairy Industries, is set to exit Malawi by June 2019. Dairibord still plans to export to Malawi, however.
