Bread price hike blocked

Minister Biti said there was no justification for the increase.

The National Bakers Association of Zimbabwe last week said it would pass the increases in the price of local flour and duty on imported flour to consumers, unless Government reduced the duty from 20 percent to five percent.

The bakers want a loaf to cost $1,20 from $1.

But Minister Biti said there had been no fundamental changes in the price and tariffs to warrant the increases.

“The statement by the bakers’ association is misleading, as you are aware there is no duty on the importation of wheat,” he said.

“Wheat is imported by millers who then produce flour for onward selling to bakers.

“What the bakers’ association is trying to do is to push us to liberalise the importation of flour.”
Minister Biti said it was irresponsible for the bakers to claim there was an increase in the price of flour.

“It is irresponsible to insinuate an increase in the price of wheat and import duty when duty on wheat is not there and has not been increased,” he said.

“As far as we are concerned, there is nothing that justifies the rise in the price of bread and we will not accept that.

“We will not accept an appetite from a small section of business to push inflation.”
Zimbabwe has maintained an inflation rate of between three and four percent since the introduction of the use of multiple currencies.

Minister Biti said that the price of oil was declining on the international market, ruling out the price of fuel as a factor in the increase of the price of bread.

The Grain Millers Association of Zimbabwe also said the increase in the price of wheat on the world market did not warrant any local bread price increase.

GMAZ chairman Mr Tafadzwa Musarara said bakers should not use flour prices as an excuse to increase bread prices.

“If the National Bakers Association of Zimbabwe wants to increase the price of bread, let it be on another basis, and not on flour,” he said.

“The price of flour has not gone up. So, there is no need to increase the price, except if there are any other reasons such as fuel and other costs.”

Mr Musarara noted that the reported drought in the United States has affected the maize and wheat harvests in that country.

As a result, he said, livestock feed manufacturers in the US have resorted to buying wheat as alternative ingredients, pushing up demand.

“This development has seen wheat landing in Zimbabwe at a price of $495 per metric tonne from $440, which is a 13 percent increase,” he said.

GMAZ had earlier made a commitment to the baking industry through the National Bakers Association of Zimbabwe that the price of flour would be held at $34 per 50kg, all variables being constant.

In a bid to avoid the bread price increase, grain millers resolved to absorb eight percent and passed on only five percent of the increase to the price of flour.

The price of flour, in reality increased from $34 per 50kg to $36 per bag, an increase of only $2 per 50kg bag. “This means that out of 102 loaves of bread produced from a 50kg bag of flour, the price increase is only 0,019 cents and GMAZ believes that between the bakers and the retailers, 0,019 cents can be absorbed,” said Mr Musarara.

The GMAZ emphasised that the increase of the price of flour on its own did not in any way warrant the bread price increase.

The GMAZ said it would continue to keep its commitment on the stabilisation of prices for maize meal, rice and other staple foods. But the National Bakers Association of Zimbabwe president Mr Dumisani Moyo insisted that the costs of producing bread had gone up. “The price of flour has increased from between $680 and $690 per tonne to between $710 and $740 per tonne, so I am not sure of the basis of their statements,” he said.

“We have been seeking to meet Government officials to show them where we are coming from and if they are saying there is no justification then that is regrettable,” Mr Moyo said.

He said a meeting to discuss the proposed price increase between the Government and stakeholders in the baking industry that was scheduled for yesterday was postponed to tomorrow. The National Bakers Association of Zimbabwe (NBAZ) is pushing for the increase of the price of a loaf of bread from $1 to about $1.20. Mr Moyo said the increase was meant to boost the sector, which at the moment is making a loss.

“The meeting did not take place because the concerned Government officials were committed elsewhere. We had expected to meet senior officials from the Ministry of Industry and Commerce, the Ministry of Finance, the Agricultural Marketing Authority, grain millers and the bakers,” said Mr Moyo.

He said the price increase was inevitable unless there was an immediate drastic downward review of the import duty on flour. — Harare Bureau/Chronicle Reporter.