Millers and packaging manufacturers deliberate mealie prices on high packaging costs

ZIMBABWE – Millers and packaging manufacturers are seeking to reach a consensus on mealie prices following an increase in the cost of packaging by over 500%.

According to the Herald, the decision by manufacturers of packaging for mealie meal and bread to more than double their prices could see the prices of mealie meal going up from the current average price of US$5.50 for 10kg of roller meal.

This comes even as Zimbabwe is struggling to recover from a long time forex crunch which has made it difficult for business who depend on imported raw materials for their operations.

Bread and mealie producers, local and regional packaging producers have convened a meeting to discuss the way forward on the price hikes, which are said to be unsustainable and may affect the entire value chain.

The price of packaging for a loaf of bread rose 633% to 22 cents from 3 cents a plastic, that for a 5kg mealie meal packaging rose 85% to 37 cents while that for a 10kg pocket increased 62% to 37 cents.

Packaging costs for 20kg pocket increased by 122% to 89 cents and that for 50kg pocket has jumped 114% to cost 89 cents.

Plypropylene which used to cost US$1.34 in bond notes or RTGS is pegged at US$2.76 while laminating plastic costs US$6 per kilogram from US$2 for 5kg, representing a 1 400% increase.

Speaking on the matter, Grain Millers Association of Zimbabwe (GMAZ) general manager Lynette Veremu said there was an urgent need for a downward review of the new prices for packaging, likely to see an increase in mealie prices.

“Not only have they increased the prices by in some instances 700%, but they are also demanding their payments in foreign currency and this is the reason why we have arranged this meeting with them so that we deliberate on the implications to consumers.

“We have also invited to the meeting South African companies which are also in the packaging material manufacturing business so that we share and exchange views in an effort to find a workable solution that does not affect the already burdened consumer whom all the costs are extended to,” said Miss Veremu.

Import ban temporarily lifted

New developments in the industry including challenges in foreign exchange, shortage of raw materials and lack of capacity have seen the prices of bread revised higher, from US$1.10 to US$1.40.

To this regard, the government last month amended a 2017 ruling to allow companies and individuals with offshore and free funds to import specified basic commodities.

This aimed at improving the supply of basic commodities given that the country has faced severe shortages of basic goods such as sugar, cooking oil and flour.

The supply gap was attributed to lack of hard currency, panic buying as well as hoarding of the commodities.

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