In a piece of rare good news, the Grain Millers Association of Zimbabwe (GMAZ), has announced the reduction of bread prices from $80+ to $66 ZWL per loaf. This is the first time the price of bread has gone down this year. According to GMAZ the reduction is because they were now able to obtain foreign currency during recent auctions held by the RBZ.
Prior to this development bakers and millers were relying on wheat imported using “free funds.” This probably means some of that foreign currency was obtained on the black market which had a reputation for being volatile. Traditionally bread has sold for around $0.80 to $0.90 USD and bakers tried hard to maintain that rate. This however made bread less affordable to most people whose incomes have remained stagnant.
1. In May 2020. Grain Marketing Board advised millers that they had run out of wheat and millers had to import on their own to meet market requirements. this led millers to resume imports using tree funds. Regrettably, the price of bread flour could not be stabilised as before as it was now susceptible to vagaries of moving rate. Consequently, in the past 8 weeks, bread prices moved from 2WD18 per standard loaf of bread to current price of ZW07400 per standard loaf of bread largely on account of flour. Equally affected was also the rest of confectionery and biscuit products.
2. Admittedly, the price of bread, a necessity in all households, had become expensive and indeed worsened the cost of living. Following the reestablishment of the Foreign Currency Auction System by Reserve Bank, GMAZ, has had fruitful discussions with the RB2 Governor, Dr. Mangudya, whereupon foreign currency allocations to millers are now being made.
3. As a result, on behalf of wheat millers. I am pleased to advise that the cost of bread flour, with effect from 3, July 2020, has been reduced from ZWD3,150/50kg to ZWD2,136.89
4, Consequently, the bakers have committed to reduce the price of a standard loaf of bread from Wholesale Price of ZWD70.00 and Retail Price of ZWD79.00 to Wholesale Price of ZWD59 and Retail Price of ZWD66.00. From now on, our prices will be guided by the Foreign Currency Auction outcomes.
5. Further, GMAZ private wheat imports are continuing and we are endeavouring to ensure national adequate supplies between now and December 31, 2020.
T. Musarara CHAIRMAN