Price of bakers flour goes up 4 times

By Violet Gonda
3 January 2007

The price of baker's flour is reported to have gone up by more than four times Wednesday, adding more misery to desperate Zimbabweans who were bombarded with price hikes over the festive holidays. A 50kg bag for bakers went up from Z$7 500 to Z$30 517. And it is feared the price of bread will go up to more than $1200 a loaf, up from Z$850 - the official price granted to the bakers by the government.

Bulawayo retailer Eddie Cross said; “The new bread price announced on the 22 December by government was based on the old price. This completely negates the price increase and puts bakers back to where they were before the increase - in a loss position if they manufacture and sell bread at the controlled prices.”

There has been a spate of huge increases that have seen sugar prices doubled although the commodity is said to be out of supply. Again this will have a ripple effect that will see the costs of products that use sugar as a basic ingredient, like jam and cool drinks, skyrocket.

There has also been a serious shortage of mealie meal. Cross said there were near riots in Bulawayo on Wednesday as major wholesalers, including the Grain Marketing Board, failed to supply the commodity.

The businessman said yeast prices, the price of fats and oils have also risen dramatically as has the cost of packaging and energy. Fuel is now selling for over Z$3 000 a litre, automatically doubling bus fares.

Many companies are being forced to raise prices due to lack of foreign currency, the money needed to buy spare parts and raw materials. The controlled price, which the retailers are allowed to charge customers, is below the cost of production.

The private sector sees this as a crisis created by the government, which is forcing them to reduce retail prices but failing to address the manufacturing costs and the price of raw materials.

The cost of living is constantly rising but the average wage of the ordinary worker does not seem to rise with it. The minimum wage for industry workers is said to be Z$65 000, with some sectors as low as Z$45 000. And in rural areas the minimum wage in agriculture is reported to be around Z$10 000 (about US$2.50).

Analysts say the only way Zimbabwe can progress is if there is general political reform and if the government seeks some form of democratic legitimacy.