RLL Container Report - 14 February 2018
From: John Keir, Ross Learmont Ltd. Email: email@example.com Date: 14 February 2018
Thinking outside the box.
The three southern African countries of Zimbabwe, Zambia and Malawi have much in common: all three have a population in the region of 17/18 million growing at a very fast rate. All three operate the 1067mm “Cape” rail gauge and use English as their common language. More importantly, all three countries face a major challenge in feeding their expanding populations at the same time as increasing their traditional agricultural exports. Finally, the three nations are all land-locked and rely on transhipment via third party ports - mainly in Mozambique. In the case of Zimbabwe, agriculture contributes only 11-14 percent of GDP, but the sector provides employment for some 70 percent of the population, and about 60 percent of all raw materials used in industry. Around 45 percent of the country's exports are of agricultural origin. In order to achieve the required growth in agricultural production, the government of Zimbabwe and its neighbours to the North, have been holding discussions with Russia’s leading fertiliser producers, Uralkhim and Uralkaliy
The purpose of the meetings is to establish a more efficient and cost-effective means of supplying fertilisers to the main agricultural production centres, which will feed the projected rapid population growth. The Southern African countries fully understand that they need to establish and maintain closer links with the major global producers of fertilisers. For their part, the two Russian companies welcome the opportunity of co-operating directly with the central governments in order to establish a more efficient and cost-effective means of supplying fertilisers. The Russian producers believe that this closer co-operation could reduce the cost of fertilisers from the current level of USD 450-500 per ton to USD 250-300 when delivered to an African port. Traditionally, the trade has been conducted by a large number of middlemen, who were buying the fertilisers cheap on the global market but who were then selling on the products at greatly inflated prices.
At the same time, a far more streamlined transport and distribution network would greatly reduce the cost of transporting, storing and then distributing the fertilisers directly to the farmers in time for the planting season. The Russian producers calculate that by eliminating the middlemen and replacing them with direct co-operation between the various governments and the producers, they could increase exports to southern Africa from one hundred thousand tons to five or even six hundred thousand tons per annum.
John Keir, Ross Learmont Ltd.
14 February 2018
Copyright ©, 2018, John Keir