Weeks after the government sought to force down the price of bread by promising bakers access to forex at the central bank, the Grain Marketing Board (GMB) has raised the price of wheat which industry players say will inevitably push up prices.
The GMB has raised the price of bread flour, and the response from bakers was almost immediate with the average price of bread rising to Z$700 – about US$1.83 using the official exchange rate.
The Grain Millers Association of Zimbabwe said on Tuesday: “The milling industry continues to face serious inflationary headwinds which include the finance cost occasioned by the increase of interest rates from 100 percent to 200 percent and the increase of the local wheat price from GMB to millers by 0. 8 percent.
“The interbank exchange rate has moved up by 5.5 percent from US$1 : Z$362,6 to US$1 : ZW$382,5. The currency devaluation has severely impacted on the general operational costs. There was also an upward review of the prices of fuel.
“The aggregate impact of these movements will be around 10 percent 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.”
The Reserve Bank of Zimbabwe recently pledged to prioritise foreign currency allotments to the National Bakers Association of Zimbabwe to facilitate the importation of wheat and procurement of fuel, but the pledge has not led to a downward review of prices.