Mealie-meal, sugar prices up

THE price of mealie-meal and sugar has increased marginally in what could be attributed to fears over food shortages due to the El-Nino-induced drought.

A snap survey conducted by Business Chronicle in major retail outlets in Bulawayo yesterday revealed that prices of mealie-meal were now ranging between $5,50 and $6,05 for a 10kg up from $4,50 and $11,99 for a 20kg from less than $10.

Similarly, a pack of 2kg sugar now costs up to $1,99 from $1,65 and less.

Last month the Consumer Council of Zimbabwe noted in its monthly price review that roller meal prices had increased by $0.99 from $9.30 to $10.29 for a 20kg bag.

The increase in prices is likely to induce panic among consumers.

Grain Millers Association of Zimbabwe president Tafadzwa Musarara said: "I'm not in the office today so I can't give you anything. I'll need to consult with retailers and find out why they increased prices so I'll also need you to send me a list of the supermarkets you went to and observed the increased prices.

"Then I'll talk to them and find out why they increased. I won't be able to do that today because I'm not in the office so send me an email and I'll respond via that medium."

CCZ executive director Rosemary Siachitema could also not comment saying her organisation was yet to issue a report on the latest consumer basket.

Zimbabwe is already importing maize from regional and overseas producers to boost reserves as part of measures to avert hunger.

The government has already engaged the international community for food aid after President Robert Mugabe declared a state of disaster following the drought.

The drought situation is likely to affect domestic sugar production with reports that the Zimbabwe National Water Authority (Zinwa) has already reduced supplies to sugarcane estates in the Lowveld.

Media reports from South Africa also indicate that the effects of drought are starting to take their toll on the already stretched consumer as food prices escalate at an alarming rate in the neighbouring country.

South Africa is a major trading partner to Zimbabwe, supplying horticultural products and a range of finished products.

Announcing an interest rate increase to seven percent last week, South African Reserve Bank governor Lesetja Kganyago said food prices had been accelerating faster than previously expected due to the weaker exchange rate and the intensification of the drought, resulting in an upward revision to the food price forecast.

He said that manufactured food price inflation measured 7.8 percent in the producer price index, while agricultural prices increased by 25.9 percent, with cereals and other crops increasing by 79.2 percent.

These increases are expected to have an impact on consumer prices. Annual consumer price index (CPI) food price inflation is now expected to peak at 11.6 percent in the final quarter of 2016, compared with 11.3 percent previously.

Because of the drought, the price of potatoes in South Africa has more than doubled as compared to the same time in March 2015.

According to the latest information by Potatoes SA, the four biggest fresh produce vegetable markets are charging between R57.23 and R68.03 for 10kg of potatoes currently.

Last year's prices were between R25 and R35. A recent survey by the Crop Estimates Committee (CEC) revealed that South Africa might trim its estimate for maize production this season by 2.5 percent because of damage from the worst drought in more than a century.