The national business sector is concerned about the shortage of fertilizers for agricultural production, a product mostly imported from Russia and Ukraine, countries that have been at war since February of this year.

The military conflict also generated a sharp increase in the prices of raw materials, oil and fuel, among others. The Confederation of Economic Associations of Mozambique (CTA) points, as an example, to the price of a ton of wheat that skyrocketed in the international market.

According to CTA's Mozambique Business Robustness Index report for Q1 2022, the country imported 35% of wheat volume for domestic consumption from Russia and Ukraine, and invested about $192 million in 2020 and $216 million in 2021.

"The impact of the Russia-Ukraine conflict has caused a shortage of inputs for agricultural production, an increase in the price of raw materials, foodstuffs, such as sunflower oil, and fuel," reads the document, presented recently by CTA, in the city of Beira, during the opening of the VIII edition of the Economic Briefing.

To avoid a rise in the price of bread, a product that has wheat as its raw material, the Mozambican business community points to the exemption from Value Added Tax (VAT) of customs duties on yeast, a fact that will reduce the cost structure in the order of 1.39%.

To establish grain supply contracts with stabilized prices, CTA says the option would be to import the product from countries that are not in conflict, such as Argentina, Canada, Australia, and the United States.