International suppliers of wheat have reportedly hiked prices by $35 per metric tonne in response to rising shipment costs, a development likely to trigger a sharp increase in the prices of flour and bread among net importing countries such as Zimbabwe.
Although Grain Millers’ Association of Zimbabwe chairman Tafadzwa Musarara declined to comment over the matter yesterday, saying he would release a statement Monday next week, a local miller, who declined to be named, confirmed the development.
“We are going into a meeting tomorrow (today) with all the millers and I will release a statement on Monday,” Musarara said.
The miller who spoke on condition of anonymity said global wheat prices had increased by between $30 and $35 per tonne.
“The global wheat prices have increased by between $30 and $35 per metric tonne meaning that you now need to pay $405 per metric tonne from the $370 we were previously paying, and also this depends on which port you are loading from,” the miller said.
“So, we are set to experience an increase in bread and flour prices because we have to import as we are not self-sufficient in terms of wheat production. We must be able to avoid panicking mode among people, which can result in bulk buying.”
Economic analyst Gift Mugano said the price increase would affect the whole value chain and demand for foreign currency.
“We are producing about 40% of national demand and this means we are not self-sufficient because for the remaining plus 60%, we import. So this increase in the price of wheat will automatically translate into an increase in the price of wheat per tonne,” he said.
For a number of years, we have not been able to meet the national demand for wheat and we only import to meet our demand. Zimbabwe should work extra hard to ensure that we produce enough wheat and curb the import costs. Wheat contributes 70% of the country’s flour.”
Mugano said the import bill would increase by 15% and the Reserve Bank of Zimbabwe should be ready to avail more cash for wheat imports.
“The import bill will increase by 15% and this means the RBZ should be ready to avail hard cash to millers for the import of wheat, as the situation will affect mainly departments and these includes the millers, bakers and consumers,” he said.
“We are not only projecting an increase in bread and flour prices, but also biscuits and buns, as these are somehow used by our children at schools. So there is urgent need to look into our budget.”
Local millers have sourced 200 000 metric tonnes of wheat from Germany and Canada, a consignment that is coming in installments until the winter harvesting season.
So far, 30 000 tonnes have been received amid fears that the remaining 170 000 tonnes could also be affected by the new pricing regime.
Zimbabwe requires an estimated 400 000 tonnes of wheat per year to meet its demand of about 950 000 loaves of bread per day. Local annual production capacity stands at 200 000 tonnes, leaving a shortfall of 200 000 tonnes, which has to be met by imports.
Source:www.newsday.co.zw
