Mozambique ICM: Suspends 3 Grain Importers, Seizes 34,300 Tonnes

• Mozambique's Cereals Institute (ICM) has suspended three major grain importers: Companhia Industrial da Matola, África Indústrias, and Pembe Mozambique.
• A total of 34,300 tonnes of grain belonging to these companies have been seized, pending resolution of disputes over import approvals.
• The new Mozambique Cereals Institute import regime, introduced this year, grants ICM extensive powers to register importers, approve orders, identify suppliers, and monitor transactions.
• This regulatory overhaul followed government allegations of illegal foreign currency transfers by importers using inflated invoices under the previous liberalized system.
• The ICM now holds both regulatory and commercial powers, allowing it to oversee private importers while also engaging directly in grain imports and related services.

The ICM now holds both regulatory and commercial powers, allowing it to oversee private importers while also engaging directly in grain imports and related services.

Mozambique's Cereals Institute (ICM) has recently taken decisive action, suspending three prominent grain importers and seizing a substantial quantity of their commodities. The affected companies are Companhia Industrial da Matola, África Indústrias, and Pembe Mozambique, from whom a total of 34,300 tonnes of grain have been confiscated. The immediate point of contention revolves around whether these firms proceeded with their imports without securing the necessary approvals from the ICM, a requirement under the nation's revamped import regime.

This significant intervention by the Mozambique ICM suspends grain importers and highlights the institute's expanded authority over the country's food supply chain. The government's new approach aims to exert greater control over the importation of staple foods like rice and wheat, which are critical for national consumption. The actions against these three major players underscore the seriousness with which the new regulations are being enforced, signaling a stricter environment for all entities involved in the import of essential foodstuffs.

The current, more centralized Mozambique Cereals Institute import regime was implemented this year, replacing a previously liberalized system. This policy shift was prompted by government allegations that the former system was susceptible to abuse, specifically citing instances where importers allegedly used inflated or duplicated invoices to facilitate illegal foreign currency transfers out of Mozambique. To counter such illicit activities and ensure greater oversight, the ICM has been vested with extensive new powers.

Under the new framework, the ICM now plays a comprehensive role in managing grain imports. Its responsibilities include registering all importers, scrutinizing and approving their orders, and assessing whether proposed quantities are genuinely justified by market demand. Furthermore, the institute is tasked with identifying acceptable suppliers, and meticulously monitoring both payments and shipments to ensure compliance. This enhanced ICM foreign exchange control is designed to safeguard national economic interests and prevent fraudulent practices within the import sector.

The expanded mandate of the ICM raises significant questions regarding the concentration of both regulatory and commercial powers within a single institution. Beyond its role in overseeing private importers, the ICM itself possesses the authority to directly import grain, negotiate government-to-government purchases, contract procurement and logistics services, and even appoint partners for sourcing cereals internationally. This dual capacity means the institute can regulate private sector entities while simultaneously acting as a competitor or selecting specific companies to participate in various aspects of the trade.

Despite the ICM's pervasive oversight, the financial burden and inherent risks of importation continue to rest squarely with private companies. Importers remain responsible for securing bank financing, settling payments with suppliers, and covering all associated costs, including freight, insurance, customs duties, and storage. The ICM does not assume these financial obligations; instead, it acts as an intermediary, granting permission for transactions and reportedly charging for these approvals. The situation is further complicated by the background of one of the implicated firms, África Indústrias, which is associated with Royal Group, a conglomerate whose commercial dispute with ETG led to ETG's ongoing international arbitration case against Mozambique concerning a pigeon-pea dispute. This same company also faced scrutiny in March when Customs seized 25,000 tonnes of rice imports that were partially declared as seed, highlighting a history of regulatory challenges.

Lawyers and compliance officers advising companies importing rice and wheat into Mozambique must immediately assess the new, highly centralized regulatory and commercial powers of the Cereals Institute (ICM) to ensure strict compliance with import approvals, supplier identification, and payment monitoring, thereby mitigating risks of asset seizure and operational disruption.

Source: Reporting based on recent market analysis.