by Business reporter
Bakers are set to increase bread price by 8% from an average of ZW$95 to ZW$103 per loaf, in response to the increase of fuel and other production costs.
An official from the Ministry of Industry and Commerce revealed the looming price hike which he said was announced at a meeting held last week between the National Competiveness Commission (NCC) and the bread value chain players.
The National Bakers Association of Zimbabwe (NBAZ) president, Dennis Wallah reasoned that the price of fuel had a positive correlation with prices of bread.
“Because of this connection, the bread price is likely to increase following a shift in the price of fuel. Production costs have also increased by 19% since January,” said Wallah.
The price of petrol increased by 3% from an average of $1.30 to $1.34 per litre, on 5 April 2021.
Wallah urged the Reserve Bank of Zimbabwe to speed up the disbursement of foreign currency sourced from the Auction System. He said delays in the disbursement, which is the status quo, forced them to source from other sources which have high exchange rates.
The NBAZ president said their external suppliers of baking fats and packaging material were insisting on upfront payments.
The hike of bread price comes barely a month after it rose by 9% from ZW$87 to ZW$95. In January this year, a loaf of bread rose fromZW$81.69 to ZW$88, reflecting a 7.7% increase. This came at the backdrop of yet another 7.4% price adjustment effected by bakers on 24 December 2020.
An economic analyst, Dr Noah Sithole suggested that the solution to arrest frequent bread price increases lies in import substitution.
“In order to avoid frequent bread price increases, there is need for import substitution through the resuscitation of companies like Olivine Industries that used to supply baking fat and premixes which are currently being imported from South Africa,” said Dr Sithole.
The Government and the ruling party are very conscious of some businesses which want to cause confusion and inflict economic pain on citizens.
While addressing ZANU PF’s Administration and Policy Coordinating meeting on Monday, the party’s Secretary for Administration, Dr Obert Mpofu raised concern over the slowly increasing prices of basic commodities. He said basic commodities must be affordable to every citizen.
In February, the ruling party had to appeal to the business community to conduct their business ethically.
"The revolutionary Zanu-PF Party is concerned by the recent spike of cost of goods and services particularly basic commodities. Such a development has no grounding in basic economics and it is merely a manifestation of greed in some of our business entities," said Cde Simon Khaya Moyo in a sharply worded statement.
