LIVINGSTONE MARUFU
The price of bread has gone up 20% to ZWL$60 per loaf from ZWL$50 due to the high cost of production and rampant inflation.
The development comes at a time when the local companies are grappling to access foreign currency on the formal market to buy raw materials.
National Bakers Association of Zimbabwe (NBAZ) president Denis Wala told Business Times the continuous movement of forex rates on the parallel market has had multiple effects on bread production.
“In the past few weeks the movement of the rate on the parallel market made it difficult for bakers to continue producing as the prices of raw materials continue to rise on a daily basis.
“The rate has moved from 1:70 two weeks ago to 1: 100 this week and this
has made our members adjust bread prices accordingly,” Wala said.
Various companies have struggled to access forex from the interbank trading platform, causing most of the manufacturers to look for forex on
the black market.
Wala said the Grain Marketing Board has hiked the wheat
producer’s price, therefore, the millers have also increased and this has had
an impact on the bread price increase.
He said NBAZ are the last in the value chain because members buy raw materials at inflated prices and all costs hit hard on them making it
very difficult to operate. At peak the country produced over one million
loaves a day but the numbers have since dropped to less than 400 000
loaves a day.
Analysts say the price increase on bread will push up the price of other
basic commodities as bread has an effect on other commodities.
Zimbabwe requires between 350 000 tonnes and 400 000 tonnes of
wheat yearly for consumption.
Last year, the country managed to produce less than 100 000 tonnes
of wheat, leaving the monetary authorities to import over 250 000
tonnes of wheat.
However, it is often argued that even if the country manages to produce the national requirement, the country’s wheat is not suitable for bread baking as it needs to blend with foreign wheat to make standard bread.
Local wheat is mainly for selfraising and biscuit making due to warmer climatic conditions.
Meanwhile, Confederation of Zimbabwe Retailers president Denford Mutashu said suppliers will continue to increase prices as long as
there are challenges in accessing forex on the formal platform.
The Reserve Bank of Zimbabwe said it is providing foreign currency
to some manufacturers despite a shortage in basic commodities supply.
However, economists say there are no letters of credit in the economy for
producers to access forex hence prices are bound to increase on a daily basis.
