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movements from mid-December to the month of February 2011.
The survey revealed that prices of some commodities have continued on an upward trend in the year 2011. It has been noted that on average, prices of different commodities have increased by between 1 percent and 22 percent from mid-December 2010 to February 11 2011.
From the survey carried, a number of factors were established as to why prices were behaving in an upward trend.
Firstly, there have been some general steep movements in the prices of agricultural commodities on the international markets.
The weather patterns and demand dynamics that have affected major country exporters of agricultural outputs such as wheat, maize, soyabeans and palm oil have resulted in gross speculation on the commodity futures markets which have resulted in the prices firming up. Zimbabwe being a net importer of these agricultural inputs has not been spared.
Fuel prices have also been increasing thereby creating inflationary pressures on prices. As a result of increasing transportation costs and crude oil related packaging, prices of most basic commodities have been slightly affected. Anticipation of salary increases in the economy also saw some retailing businesses adjusting their prices upwards with the hope of maximising their revenue.
The firming of the rand against major currencies up to January 2011 has been cited by manufacturers and retailers as the major cause of price increases since our country heavily depends on imports from South Africa.
Of concern, however, is the fact that prices have not declined in line with the weakening of the rand since February 2011. The rand is now trading at 7,26 to the US dollar from a high of 6,75 in early January 2011.
Below are the average percentage increases of some commodities from mid-December 2010 to 11 February 2011.
l Mealie-meal showed an average price increase of 6 percent since mid-December, flour on the other hand showed an average increase of around 1,4 percent. Despite the increase in the prices of flour, bread prices have remained stable though. Rice, on the other hand, has increased by between 1 percent and 7 percent with the Mahatma brand showing the biggest movement of 6,5 percent. Milk products on the other hand showed some upward movement of 1 percent to 3 percent with Everyday milk powder increasing by 2,53 percent.
l Eggs, on the other hand, recorded a 6,9 percent increase in price and salt showed an increase of between 2 percent and 9,3 percent. Washing powders have on average increased by between 3 percent to 9,39 percent. Colgate, on the other hand, showed an increase of 12 percent while the highest climber has been laundry soaps recording a 22 percent increase. Cooking oil (D’lite) adjusted upwards by 7 percent. Kapenta has increased by 6,7 percent.
However, of great concern is the fact that variations in prices for same brands of commodities in different shops are becoming wider and wider. For example, products such as chicken portions, eggs and toothpaste to name but just a few have wide variations in the different supermarkets.
This shows that the mark-ups being applied by most companies in the business community are too high. Therefore NIPC encourages the consumers to shop around before final purchases.
Wholesalers and retailers are unfairly increasing prices citing the hardening of the rand against the dollar and higher international commodity prices. The percentage increments on commodity prices and the exchange rate fluctuations do not justify the current price increases witnessed in the retail sector. Retailers are urged to exercise fair pricing practices and desist from speculative practices that are now seriously undermining the economy.
National Incomes and Pricing Commission
3rd Floor, Runhare House
Cnr Fourth Street/Kwame Nkrumah Avenue
Harare
Mr E. Ndlovu – 0777095698
Mr L. Borerwe – 0773979108
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