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Bread price jumps 13,8%

by Staff reporter
25 Dec 2020 at 07:11hrs | Views
THE price of a standard loaf of bread has risen by 13,8 percent this week to $82 from $72 and consumers feel the move is not justified.

Some retailers, who had already effected the latest price adjustment on Wednesday, said they were caught off-guard by the latest increase by suppliers. While the country has recently been enjoying price stability on the back of a stable exchange rate, consumers say the latest bread price increase comes as a surprise.

Confederation of Zimbabwe Retailers (CZR) president, Mr Denford Mutashu, also expressed shock but suggested that the move could be linked to rising cost of production.

"We (retailers) were caught off-guard by the increase in the price of bread but may point to continued increase in rates and utilities charges that have not respected stability in the economy brought about by the forex auction system," he said.

"The increases in the cost of production may have piled pressure on bakers. It's difficult to hold price as a business when costs increase."

National Bakers Association of Zimbabwe president, Mr Dennis Wallah, had not responded to written questions from Business Chronicle by the time of going to print yesterday.

Through the weekly Foreign Currency Auction Trading System introduced in June this year, the Reserve Bank of Zimbabwe (RBZ) has managed to stabilise the exchange rate with the Zimbabwe dollar this week easing marginally against the United States dollar to 81,78 from 81,73 last week.

National Consumer Rights Association spokesperson, Mr Effie Ncube, said as an organisation they were outraged by the conduct of the bakery industry, which has decided to raise the price of bread during the festive season.

"This will deeply affect poor and low-income households and rob them of celebrating Christmas and New Year with bread on the table.

"This price hike has no business justification whatsoever," he said.

"It's industry just profiteering by abusing poor consumers and taking advantage of the festive season.

"We urge the Government to step in and prevent this punitive and unjustifiable bread price hike. "Bread is a basic commodity that should never be priced beyond low-income households who constitute the majority of consumers," said Mr Ncube.

Meanwhile, the Grain Millers Association of Zimbabwe (GMAZ) has revealed that the local milling industry's capacity utilisation has dropped below 20 percent as maize-meal and flour imports pile pressure on local producers.

GMAZ has raised fears that the sector could suffer massive job losses due to loss of business on account of weakening grip on domestic market.

In a position paper on import duty and surtax imposition on imported mealie-meal and wheat flour, the milling industry now wants the Government to cap the quantity of imports as well as review import permits.

The Government gazetted Statutory Instrument No 119 of 2020, which suspended import duty on maize-meal and wheat flour in May this year as part of measures to enhance supplies of basics.

This was prompted by challenges in mobilising maize and wheat imports due to Covid-19-lockdown related constraints. The Government then instructed the milling industry to also assist by importing some of the maize and wheat.

Since April, GMAZ claims that its members have imported 148 000 tonnes of wheat and 160 000 tonnes of maize.

"Regrettably the milling industry's capacity utilisation is below 20 percent due to the local market which is flooded with imported maize-meal and wheat flour," it said.

Source - chroncile