Bread shortage looms as RBZ moves in to control prices

THE recent consultative meeting between the Reserve bank of Zimbabwe (RBZ) and National Bakers Association of Zimbabwe with view of reduction of bread price has triggered fears of a possible bread shortage, industry players have said. The apex bank this week resolved to give members of the BAZ access to the weekly foreign exchange funds via auction for importation of inputs and procurement of fuel in order to curb the gross rise in the bread prices.
This development has however been described as a ‘2008 reincarnate’, where price controls caused shortage of basic commodities.

A loaf of bread is pegged at $2,27, a 100 percent increase,.
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In the past two month, the bread price has been rising at an exponentially rate partly due to the global commodities crises partially triggered by the Ukraine/Russia war.

In a statement, RBZ announced what they termed as a “positive engagement” with the bakers.
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“In view with this positive engagement with the Bakers Association, it is expected that members of the Bakers Association will review the price of bread downwards. Going forward, the price of bread will be adjusted on account of economic fundamentals that include global price trends of inputs and the movement of foreign currency exchange rate,” propounded the RBZ governer John Mangudya.

He added:
” Taking into account the submission buy the Bakers Association and the need to stabilise the price of bread , the bank agreed with the Bakers Association that its members would access their full requirements of foreign exchange through the weekly foreign exchange auction for importation of input and procurement of fuels for the distribution of bread across the country.”

Speaking to Express Mail Zim an industry player bemoaned this move and opined that bread will dissapear on the shop shelves.
“It’s much ado about nothing, this has always been in place even when there was a glut of wheat globally. This speaks to poor economic management by the powers that be, why is there no major wheat shortage in other countries in Southern Africa.
” Controlling bread price will just take us back to 2008/9 bread shortages will occur. The biggest cost for bakers is not really the flour or wheat but logistics.These guys just have got to get the economy right, Mr Ncube (Mthuli) needs to tackle issues practically not bookish policies,” opined an industry player who preffered anonymity.

National Bakers Association of Zimbabwe president Dennis Wallah said the the bread price hikes was owing to an upward surge in cost of fuel and bread flour.

The Grain Millers Association of Zimbabwe (GMAZ) last week also increased the price of maize and wheat by 50 percent and 17,8 percent .

Zimbabwe has over the past years struggled to meet rising demand as locally produced wheat is not suitable for bread manufacturing and mainly reserved for other confectioneries.

Bakers have instead been mixing locally produced wheat and the imported wheat.