The Grain Millers’ Association of Zimbabwe (GMAZ) said that the sharp increase in the price of a standard loaf of bread was triggered by the government’s decision to raise producer prices for major cash crops.
Bakers were forced to hike the price of bread from $2.00 up to $3.50 by GMAZ’s decision to raise the price of flour by 50 per cent as well as the fall in the value of the RTGS dollar on the alternative market.
In a letter addressed to the Industry and Commerce Ministry on Tuesday, GMAZ chairperson Tafadzwa Musarara said:
We welcome the recently-announced wheat and maize prices and marvel the government effort in balancing viable producer prices and affordable subsidy level.
Consequently, we wish to advise that the following maximum recommended prices of maize meal and bakers flour shall apply effective Monday, April 15, 2019.
Ten-kilogramme roller meal at ZWL$10,50 at a recommended retail price of ZW$11,85 and 50kg bakers flour at ZWL$83.
However, the surge in prices has not been limited to grain products. Prices of goods increased across the board.
Speaking to Newsday, a vendor from Mabvuku had this to say:
I was surprised in the morning when I went to buy bread only to discover that it had gone up by more than a dollar to ZWL$3,50.
I had thought that things were going to be fine, but it has turned out otherwise. I am calling on the government to address this situation because we are suffering.
An economist, Brains Muchemwa said that the rise in the price of bread was inevitable as the product had been subsided by the government for many years. Said Muchemwa:
The price of bread has for many years been subsidised by the government. The advent of austerity measures and the partial liberalisation of the exchange rate has opened up cost structures across the whole economic spectrum, including the bakeries industry.
It was inevitable that the general price levels would rise, and should rise further until the economy corrects the imbalance that exists between huge RTGS dollar balances that were being created over the last four years without tangible productivity on the domestic economy.
Meanwhile, the government has since pleaded with bakers to reverse the bread price hike, to allow for consultations to take place.
Related:
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RTGS Dollar Black Market Rate In Free-fall, Pushing Up Prices – Report
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Price Of Bread Hiked To $3.50 Per Loaf