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Millers mull roller meal price hike

by Staff reporter
13 Jul 2020 at 08:18hrs | Views
GRAIN Millers Association of Zimbabwe (GMAZ) chairperson Tafadzwa Musarara has announced plans to increase the price of subsidised roller-meal to between US$2,50 and US$3 to cushion millers from inflationary pressures prevailing on the market.

Zimbabwe is facing acute shortages of roller-meal owing to uncompetitive pricing, delays in subsidy disbursements by government and grain shortages.

Addressing journalists on the outcome of the GMAZ and Finance and Industry ministries meeting in Bulawayo on Friday, Musarara said the current price of $70/10kg bag was unsustainable and would drive most millers out of business.

"We feel that the subsidised price of mealie-meal should be at US$2,50 and US$3 sustainable to the millers and to the retailers. We have appealed to the government that it be reviewed accordingly. We are aware of the declining value of incomes, but we also need to have the product available. It doesn't help to have a mealie-meal which is not available for $70. We need to have equilibrium between the viability of millers, the concerns of consumers and the interventions of the government," he said, adding that the current pricing model places roller at US$1,05 for a 10kg bag.

Musarara said some retailers were no longer keen on selling the subsidised mealie-meal whose profit margins were negligible.

"So, we have the cheapest mealie-meal in the world and the second issue is that some retailers are not keen to sell that mealie-meal because the margin is only $7, they buy at $63 and sell at $70 and it is not worth the commotion and the stampeding that happens outside the shops," he said.

"We feel that it has come a time that we increase the price of mealie-meal to consumers."

Musarara bemoaned delays in subsidy payments by government, which he said had led to shortages of the commodity.

"We have serious problems with late payments of our subsidy monies from the government," he said.

"I will give an example that one would produce one tonne of flour and it will cost $30 000, but you are told to sell it at $6 300 to a shop and the variant of $23 000 is supposed to come from the government. This money comes in some instances two or three months later. So this has caused serious haemorrhage to the cash flows of millers, leaving them poorer than they were, as they were the ones who were subsidising the programme."

Added Musarara: "So, we are not immune to those changes in the environment and we have requested that the subsidies be paid upfront so that millers can expeditiously mill and distribute this under consideration, the current subsidy programme, we were told, ends at the end of July. So we are waiting for the government, whether they are going to continue with the subsidy, is it on the same grounds or they probably move to coupons or cash, advancement or something else. We are yet to be guided."

Industry minister Sekai Nzenza was not reachable for comment, while her deputy Raji Modi is in Australia, having been holed up there for three months after the coronavirus outbreak disrupted international travel.

Information minister Monica Mutsvangwa and her permanent secretary Ndavaningi Mangwana were also not picking calls.

Source - newsday

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