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Millers table US$ price for subsidised mealie-meal

by Staff reporter
12 Jul 2020 at 10:36hrs | Views
GRAIN millers have tabled a proposal to increase the price of subsidised roller meal from $70 to between US$2,50 and US$3,50 per 10 kilogramme to cushion themselves from operational challenges.

The millers have all along complained that the subsidy by the Government on roller meal was crippling their business as in some cases they were paid months after delivering the mealie-meal. They also complained that by the time they are paid the money would have lost value due to the deprecation of the local dollar against major foreign currencies.

The Grain Millers Association of Zimbabwe (GMAZ) which represents a majority of maize-meal businesses, on Friday said they will be forced to peg the price of mealie-meal at between US$2,50 and $3,0 or equivalent of the local currency at prevailing inter-bank rate in the coming weeks.

In a statement after holding a crucial meeting with Government and other stakeholders in Bulawayo, where the organisation sought to bring to the fore its challenges in addressing the perennial shortage of mealie-meal and finding an amicable way to provide affordable mealie-meal, GMAZ said the price of $70 was now unsustainable.

During the closed-door meeting, the millers sat down with the Bulawayo Provincial Affairs and Devolution Minister Judith Ncube, officials from the Ministry of Finance and Economic Development and that of Industry and Commerce to argue their case.

GMAZ chairman Mr Tafadzwa Musarara said millers were failing to access foreign currency to purchase grain, which is the main reason they are forced to up prices. Zimbabwe needs 1,8 million tonnes of grain annually and the country is relying on imported grain for maize-meal and flour products following the devastating drought that hit the country.

"We are proposing that a 10kg bag of maize meal should cost between US$2,50 and US$3,50," said Mr Musarara.

According to Mr Musarara, the price will be converted to the local currency using the official bank rate which currently stands at 1: 65, meaning retailers will sell the cheapest brand of a 10kg pack at about ZWL$165. The proposed price is set to be the benchmark to help millers sustain their enterprises and also adequately supply the country.

"Currently a 10kg of the subsidised mealie-meal costs about US$1. That amount is cheap considering what the rest of the region is charging for the same product," said Mr Musarara.

He said maize imports require foreign currency to which millers are failing to access.

"Our argument is that currently, we are using foreign currency to import maize. We can even pay the farmers at the prevailing bank rate. In that way, we will be empowering the farmers as they will be able to import their own inputs."

Mr Musarara said on relaying their concerns at the meeting, they asked Government to pay the maize subsidy in advance to avert inflation on the value chain. He said if their proposals are met, millers will be able to meet national demand in a space of 10 days.

Following other structural challenges that came about with the onset of Covid-19 restrictions, the supply of mealie-meal to retailers had been smooth sailing in the months of April and May. GMAZ had put in place a zonal distribution plan that made it easy for consumers to access the basic commodity. Of late, there has been an acute shortage of mealie-meal, with the product being sold on the street market at prices beyond the reach of many. Most dealers are selling a 10kg bag for as much as US$5.

Source - sundaynews

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