ZIMBABWE – Grain Millers’ Association of Zimbabwe (GMAZ) has faulted attempt by bakers to increase the price of bread, saying that the attempt was not justified by a rise in the cost of wheat.
According to the Herald, bakeries sought to double the bread price from US$1.10 to US$2.20 citing rising costs of inputs.
Media has it that a memo was sent from Lobels regional sales manager, Mr Zenzo Malunga to OK Zimbabwe operations manager advising him of the increase in the wholesale price of bread from US$1.10 a loaf to US$2 and US$2.20 retail price.
In the memo, Mr Malunga said the price increase had been necessitated by rising inputs costs.
GMAZ chairman Mr Tafadzwa Musarara said they were not consulted by bakers to increase the price of bread, a major staple among Zimbabweans.
“The latest (proposed) price increase of bread came as a shock to the wheat milling industry as the millers were not notified in advance or consulted on the matter prior to publication of the hiked prices as is per custom and norm,” said Mr Musarara.
“Since the previous bread increase a month ago from US$1.00 to US$1.10 per loaf, wheat bakers flour prices to bread bakers have not increased.”
The government instead ordered bakeries to maintain the old price of $1,10 for a loaf of bread.
Government support for stable prices
The move has since been rejected by the government, who in the past has supported millers with funding from the Reserve Bank of Zimbabwe (RBZ) to ensure prices of basic commodities remained stable.
RBZ in June released US$20 million for importation of wheat from Canada and Germany to supplement the insufficient national wheat stocks.
This is part of government support for the millers who were facing shortage of raw materials as a result of poor harvest in the drought-hit country.
“The current wheat bakers flour prices to bakers is indexed on 1:1 on the USD to bond.
This has been possible due to the nostro payment support we receive from the Reserve Bank of Zimbabwe, to which we are most grateful,” said Mr Musarara.
“The Grain Millers’ Association of Zimbabwe, therefore, wishes to make it categorically clear to the authorities and the consumers that it is impossible to attribute any bread prices to bakers’ flour, which is the main ingredient.
“We urge our colleagues in the baking industry to observe standing consultations and notifications protocols should there be need to increase bread prices in the future,” he said.
He urged bakeries to observe standing consultations and notification protocols in the future.
Zimbabwe requires 450,000 tonnes of wheat every year, an increase from 350,000 tons in 2010.
Millers are facing problems in addressing the rising demand attributed to changing dietary requirements.
In the middle of forex shortages, the government of Zimbabwe targets to reduce import bill by about US$100 million and produce 250,000 tonnes of wheat this year from 200,000 tons it produced last year.