Sugar mills and bakers withhold supplies

By Tererai Karimakwenda
19 January 2007

A serious shortage of sugar and wheat flour for bread has hit Zimbabwe because the Ministry of Industry and International Trade continues to ignore new price increases approved by government structures. Without final approval from the ministry, sugar mills and bakers say they will not sell any product because they stand to lose money. The same issue applies to suppliers of cooking oil and other basic commodities.

The core of the problem is the extremely high inflation rate which recently hit more than 1200% and the ministry which keeps delaying approvals. When suppliers apply for increases to make up for inflation they need approvals within a reasonable time otherwise the new price becomes outdated and profit margins change. In the past six weeks alone prices have doubled.

To make the point our correspondent Simon Muchemwa has monitored prices of some commodities since December. He said there were price increases of between 100% - 400% during this one month period depending on the product. In December a 2kg bag of rice cost Z$5000. This week it cost Z$11,200. A whole chicken was also Z$5000 in December. Now it costs Z$14,400. And an orange drink that was Z$2,800 a month ago now goes for Z$7000.

Muchemwa said there is no sugar, maize meal and self raising flour in the shops. But on the black market these products can be found at extremely high prices. As the mills, refineries and bakers continue to hold on to their supplies while waiting for government approval on prices, shortages are bound to become more critical and prices on the black market will soar even higher.

As it stands the mills and refineries are currently still not selling sugar. Our sources say they applied to the Ministry of Industry and International Trade for a price increase back December. Although the price adjustment was approved by the appropriate structures set up by government, to date the Minister still refuses to sign the approval and allow price increases.
Bakers requested a price increase in February, 2006. It was eventually granted 10 months later on December 21, 2006. On the same day, the government approved a price increase for wheat flour from Z$150 000 a tonne to Z$610 000 a tonne. This meant the bakers had to go back to the Ministry to seek a new price. Yeast and salt prices also doubled since the price adjustment. It is clear to see why this situation is not sustainable.