Chronicle Editor
Judith Phiri, Business Reporter
ECONOMIC shocks from the Russia and Ukraine conflict are spreading across the world, with Zimbabwe not spared resulting in price increases of goods and services.
Finance and Economic Development Minister Professor Mthuli Ncube last week, while responding to questions from the media in Harare, said supply chain disruptions caused by the Russia-Ukraine conflict were pushing price increases.
“We are importing wheat as a country that has shot up, price of fertiliser also shot up due to the fact that Ukraine and Russia are large producers who can supply wheat and fertilisers.
So, it’s the global factors which are not easy to deal with but there they are. Every country is reeling from the impact of imported inflation, that’s what is really happening here. It has been less of the parallel market factor but more of imported inflation,” said the Minister.
Russia is also the third-largest producer of wheat while Ukraine is ranked ninth in the world. Combined, the two countries account for about 15 percent of the world’s wheat production.
The global supply chain which has been largely disrupted has triggered a destabilisation of prices on the local market, with prices of basic commodities continuing to rise, amid revelations that a family of six now requires about ZW$93 000 for basic goods.
The cost of living for a family of six went up by 17,9 percent between February and March, according to the Consumer Council of Zimbabwe’s (CCZ) monthly price review.
The cost of living as measured by the CCZ’s low-income urban earner monthly basket for a family of six increased from the end of February from $78 191.39 to $92 192.89 by end-March , showing an increase of $14 001.50 or 17,9 percent.
“Ongoing conflict between Russia and Ukraine had a knock on effect on prices of goods and services locally. The current global dynamics including disturbances in Ukraine resulted in spillover effects on domestic prices.
Such global developments include increases in the international prices of oil, gas, fertiliser and cooking crude oil, products of which Russia and Ukraine are major producers.”
Wheat prices went up nearly 15 percent in March to $136,544 per metric tonne, and bakers have justified an 18.25 percent increase in the price of bread.
Meanwhile, the Confederation of Zimbabwe Industries (CZI) in its monthly economic report for March 2022, said the conflict, which began on 14 February, will affect manufacturers.
“Prices of fuel have increased throughout the world due to this conflict and Zimbabwe has not been spared. It is expected that the full impact of the increase in fuel will be felt in April as it cascades down the economy,” said CZI.
It noted that manufacturers and service providers will be expected to adjust prices in response to the cost pressures, as all cost build-ups tend to have a lag effect in the market.
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