malvernmugadzikwa
Debra Matabvu
Some retail outlets began reducing prices of basic commodities by as much as 5 percent last week, in response to the continued firming of the Zimbabwe dollar, a survey conducted by the Consumer Protection Commission (CPC) has revealed.
Last week, the CPC began monitoring price movements in retail shops to gauge the market’s response to the strengthening local currency.
Earlier, the consumer watchdog undertook a market survey to establish the “base price” of a basket of key basic commodities with a view to determine whether retailers would adjust their prices in line with exchange rate movements. Prices of basic goods rose sharply last month after the Zimbabwe dollar suffered heavy losses.
But despite the local unit making substantial gains on both the official and black markets over the last month, most retailers had maintained the same prices, a practice officials believe is a form of price manipulation.
The Zimbabwe dollar was trading at US$1:$6 713 on June 16, before firming to US$1:$4 883 on Friday at the official interbank market. According to the CPC’s preliminary market surveillance report, major retailers have marginally reduced their prices and are now offering consumers a variety of payment options.
Speaking to The Sunday Mail, CPC chairperson Dr Mthokozisi Nkosi said: “Major retail outlets are displaying the reduced rates on a daily basis and giving the consumer (a variety of) payment choices.
“There has been a slight decrease of prices in Zimbabwe dollar terms, averaging 5 percent, against an expected drop of 20 percent, to be in line with the movement of the Zimdollar.
“Shops were moving with speed to implement price hikes following depreciation of the Zimdollar, but we don’t see the same speed in reducing prices as the dollar appreciates.”
The commission, he said, was “disturbed” by an emerging trend where retailers are arbitrarily increasing their US dollar prices.
“For example, in one retail outlet, a 500ml PET Coke was going for US$0,60 before the appreciation of the Zimdollar, but the same product is now going for US$0,77,” he added.
“It appears the price increase are meant to compensate for the firming of the local currency. Because of the marginal decrease of prices in Zimdollars, it is expensive for consumers to pay using US$ in these shops.
“We are soon going to engage the business community and sector associations to understand the reasons behind the sudden increase of prices in US dollar terms.”
Where there are no justifications for price hikes, he added, culprits will be dealt with in accordance with relevant laws.
According to CPC’s survey, a 10kg bag of maize roller meal, which retailed for around $56 772 in June, now costs $39 239.
A 1kg packet of sugar, which was selling for $15 200 during the same period, now costs $10 680. The survey also shows that the price of a 2-litre bottle of cooking oil now costs between $17 000 and $22 000 depending on the brand, down from $28 600 last month.
In addition, a 1kg packet of salt, which was going for $7 499, is now pegged at $5 499, while a bar of laundry soap, which was pegged at $11 499, now costs $8 060.
The price of a kg of commercial beef has dropped to $27 405 from $37 924.
A loaf of bread is retailing at $6 499, down from $9 120 last month.
Separately, Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mangudya said the local currency will continue to stabilise in the short term.
“We expect the exchange rate to continue to stabilise on account of the reduced level of the local currency in the economy and the confidence that has been brought as a result of the liberalisation of the exchange rate,” he said.
Last week, 17 pharmacies had their licences suspended for selling medical drugs using an exchange rate as high as US$1:$11 000, in violation of exchange control regulations.
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Bongani Ndlovu
Online Reporter