GMAZ want bread price increase, blame local currency volatility
The Grain Millers Association of Zimbabwe (GMAZ) has recommended that the price of bread be increased citing massive effects of “inflationary headwinds”.
The millers’ latest decision comes at a time when the country is facing an acute economic crisis. The Zimbabwean dollar is in free fall, trading at 366 against the US dollar. But the mostly used black market rate has skyrocketed to between 700 and 800.
Against this background, the millers said the industry was no longer capable of production if they continued to sell bread with the current prices.
“The milling industry continues to face serious inflationary headwinds which include: The finance cost occasioned by the increase of interest rates from 100% to 200%.
“The increase of the local wheat price from GMB to millers by 08%,” Andrew Kunambura, GMAZ Corporate Affairs Manager said in a statement.
The millers further stated that: “The interbank exchange rate has moved up by 5,5% from US$1: ZW$362,6 to US$1: ZW$382,5.
“The currency devaluation has severely impacted on the general operation cost. There was also an upward review of the prices of fuel.
“The aggregate impact of these movements will be around 10% increase in the price of flour to bakers. However, individual millers and bakers will continue to deliberate on prices, leveraging on quantity discounts, payment terms and any other considerations.”
Last month, the Reserve Bank of Zimbabwe governor John Mangudya was forced to hold a meeting with bakers over the price of bread.
Bread prices and other basic commodities have recently alarmingly spiked to levels beyond the reach of many citizens along with the cost of living.
A loaf of bread currently costs ZWL629 which is equivalent to US$1,85 in line with the official exchange rate.
Players in the baking sector justified the increases on a number of factors such as input costs involved in the sourcing of raw materials and the war between Russia and Ukraine.