‘No shortages of basic commodities’

Business Writer

GOVERNMENT has said there are no shortages of basic commodities in the formal market but suppliers and economic agents are reducing supplies to the formal sector and redirecting them to the informal market.

In a post-Cabinet media briefing on Tuesday, Minister of Information, Publicity and Broadcasting Services, Dr Jenfan Muswere, said the distortion in the supply value chain was being caused by arbitrage.

Economic agents in the informal retail sector are taking advantage of exchange rate differentials, as there have been reports of hoarding in the formal sector for resale to informal outlets, he said.

“Limited stock levels of cooking oil, mealie-meal, bread and sugar were observed in the formal outlets, while the products are readily available in the informal sector,” said the minister.

“This is attributable to arbitrage as informal retail economic agents seek to capitalise on exchange rate differentials, given the reported cases of hoarding in the formal sector for re-sale to informal outlets exclusively in US$.

“It is also evident that most suppliers have reduced supplies to the formal sector and are channelling them to the informal market where payment is exclusively in US$.”

However, Dr Muswere said it was critical to note that Zimbabwe has no major shortages of basic commodities in the formal retail sector.
He said surveys conducted by the Ministry of Industry and Commerce between September 27 and October 4 had revealed prices of basic goods had increased in formal retail shops.

“The ZiG prices of basic commodities in the formal retail outlets have increased in response to the adjustment of the local currency. However, the prices of the commodities in US$ terms in both the formal and informal outlets have remained stable.

“Both the ZiG and US$ prices are still on the higher side in the formal retail outlets, indicating an element of forward or speculative pricing and benchmarking against the black market rates,” said Dr Muswere.

He said the Government would ensure regular monitoring and stakeholder engagement to ensure market-relevant interventions continue while several measures have been put in place to support the formal sector.