adminobservers had anticipated that the decision would result in an increase in the prices of the imported basic commodities, namely cooking oil and maize meal.
A recent survey of the respective basic commodities shows that imported maize meal is no longer available in the majority of retail shops, which will be of benefit to local producers.
On the other hand, imported cooking oil is readily available, but prices of the product have gone up as had been anticipated.
Generally, the price of imported cooking oil has increased from around US$3,60 and US$3,85 to between US$4,20 and US$4,60 for two-litre containers.
Locally produced cooking oil is priced competitively at US$4,10.
However, the survey also shows that local brands are still very limited, perhaps reflective of the capacity constraints facing local manufacturers.
Experts have hinted that the reinstatement of import duty on these imported products could have a negative impact on food inflation, especially in the present environment in which Zimbabwe’s manufacturing sector is considerably uncompetitive in the region.
CCZ executive director Ms Rosemary Siyachitema recently said an upturn in the prices of some basic commodities would result from the latest import duty decision.
“We expect that in the coming month there will be an increase in the prices of basic commodities, considering that duty-free was removed on basic imported goods.
“However, CCZ will monitor the situation very closely because we already feel that goods are overpriced,” she said.
The anticipated rise in foodstuffs may have a negative impact on the country’s annual inflation target of 4,5 percent by year-end.
The country’s inflation is currently at 2,9 percent and is among the lowest in the region.
Historical trends indicate that rising prices for food, non-alcoholic beverages, health, education and services by public utilities are the major drivers of Zimbabwe’s inflation.
However, there is also a major concern with respect to speculative tendencies by local retailers.
The CCZ also noted that locally manufactured products are still not being produced and supplied in adequate volumes, resulting in their being uncompetitive against imports mainly from the South African market.
Although Zimbabwe’s high import levels from its southern neighbour also has the potential to impel inflation, the South African rand remained constantly weaker against the United States dollar during the period under review.
Average industrial capacity currently stands at around 45 to 50 percent, reflecting extensive levels of idle capacity as industry continues to face challenges in accessing affordable capital.
Meanwhile, the CCZ low-income urban earner monthly basket for a family of six increased to US$504,16 last month from US$502,04 in June.
The food basket increased from US$145,23 in June to US$146,27 in July, reflecting a 0,01 percent increase.
The food and detergents basket increased from US$158,04 in June to US$160,16 in July, reflecting a 0,01 percent increase.
In terms of the respective commodities, mealie meal went up by 22 cents, white sugar by US$0,5, salt by US$0,3, onions by US$0,20, beef by US$0,10, bath soap by US$0,4, washing bars by US$0,20, and washing powder by US$0,4.
On the other hand, the cost of the CCZ basket for transport, rent, water and electricity, health, education, clothing and footwear remained stable at US$344.
Despite global forecasts indicating continually rising food prices this year, Zimbabwe’s food prices have largely remained stable during the period.
At the beginning of the year, the benchmark index for food prices of the Food and Agriculture Organisation of the United Nations exceeded the steepest price level on record in 2008.
The index went up by 28,4 percent during the month compared to the level a year ago.
Food prices continued to climb in February, recording a year-on-year increase of 34,2 percent.
According to FAO, both demand side and the supply side factors are responsible for the rising trend of global food prices.
Online Reporter