Flour price to go up by 10%

Judith Phiri, Business Reporter  

THE Grain Millers of Zimbabwe (GMAZ) has said there will be a 10 percent increase in the price of flour to bakers, a move that will likely result in the hike of bread prices.

In a statement, GMAZ corporate affairs manager Mr Andrew Kunambura said the milling industry continues to face serious inflationary headwinds.

“Which include the finance cost occasioned by the increase of interest rates from 100 percent to 200 percent, the increase of the local wheat price from Grain Marketing Board (GMB) to millers by 08 percent.

“The interbank exchange rate has moved up by 5,5 percent from US$1: ZW$362,6 to US$1: ZW$382,5. The currency devaluation has severely impacted on the general operation cost and there was also an upward review of the prices of fuel,” he said.

He said the aggregate impact of these movements will be around 10 percent increase in the price of flour to bakers.

Mr Kunambura, however, said individual millers and bakers will continue to deliberate on prices, leveraging on quantity discounts, payment terms and any other considerations.

Meanwhile, towards the end of last month, the National Bakers Association of Zimbabwe (NBAZ) reduced the price of bread after reaching key agreements with the Reserve Bank of Zimbabwe (RBZ).

The two parties held a consultative meeting focusing on the cost build up in the bread price value chain.

The meeting followed complaints from consumers who were saying the price of bread was now beyond the reach of many. RBZ Governor, Dr John Mangudya said members of the Bakers Association of Zimbabwe would now have access to foreign currency at the weekly foreign exchange auctions.

The money, according to Dr Mangudya, is specifically for the importation of inputs and procurement of fuel for the distribution of bread across the country.

“Taking into account the submissions by the Bakers Association and the need to stabilise the price of bread, the bank agreed with the Bakers Association that its members would access their full foreign exchange through the weekly foreign exchange auctions for importation of inputs and procurement of fuel for the distribution of bread across the country,” reads part of the statement.

“In view of the positive engagement with the Bakers Association, it is expected that the members of the Bakers Association will review the price of bread downwards. Going forward, the price of bread will be adjusted on account of economic fundamentals that include global price trends of inputs and the movement of the foreign currency exchange rate.”