Rising food prices stoke inflation

By Tawanda Musarurwa
RISING food prices were the major impetus to an increase in the country’s annual inflation rate – 3,3 percent in January from 3,2 percent in December.
According to the Consumer Council of Zimbabwe, the cost of the food basket for a low-income urban family of six went up by 5 percent in January, attributed to the increases in fuel prices during the period.
Similarly, the National Incomes and Pricing Commission noted that the price of different commodities increased by between 1 percent and 22 percent from mid-Decem-ber to mid-February.
For instance, the NIPC notes that maize-meal increased by 6 percent on average during the period under review, while flour went up by an average of 1,4 percent.
Cooking oil increased by 7 percent, eggs by 6,9 percent and laundry soaps by 22 percent.
The impact of this upward price movement was best reflected in the month-on-month inflation rate, which rose by 1,3 percent to 0,9 percent in January.
Retailers have constantly justified raising commodity prices on the basis of a strengthening rand against the United States dollar as a significant amount of commodities is imported from South Africa.
However, observers have lamented the lack of response by most retailers to a weakening rand in the last couple of weeks.
The South African rand, which has been firm with a marked mid-rate averaging 6,75, is presently trading at around 7,26, giving credence to allegations of speculative tendencies on the part of retailers around changes in the value of the currency.
The NIPC has urged retailers to stop speculative tendencies.
“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 fluctuations do not justify current price increases witnessed in the retail sector.
“Retailers are urged to exercise fair pricing practices and desist from speculative tendencies that are now seriously undermining the economy,” the NIPC has said.