Zimbabwe Bread Price Go Up 60%
The price of bread, Zimbabwe’s second most-consumed staple, jumped 60% overnight due to escalating costs of production, the national bakers’ association said on Wednesday, adding more woes to consumers grappling with triple-digit inflation.
Zimbabweans are experiencing severe economic hardship that has evoked memories of the hyperinflation horrors during late President Robert Mugabe’s rule, when citizens lost pensions and savings and businesses were forced to shut down.
President Emmerson Mnangagwa, who took over from Mugabe after an army coup in 2017, has called for patience as his government struggles to convince Zimbabweans that its policies will revive an economy stricken by shortages of electricity, fuel and medicines and a drought that hit farm output.
National Bakers Association of Zimbabwe president Denis Wala said the price of fuel and electricity, as well as rolling power cuts that forced producers to use diesel generators, had pushed up the cost of producing bread.
“Bakers cannot continue to absorb all these costs; that is why we have had to increase the price,” Wala told Reuters.
Bread now costs 15 Zimbabwe dollars ($0.97) a loaf, up from 9.45 Zimbabwe dollars on Tuesday. But shortages still persisted on Wednesday, with many shops saying they had not received supplies.
Zimbabwe imports most of its annual requirement of 400,000 tonnes of wheat, but acute shortages of dollars have constrained imports.
Although farmers have started harvesting wheat, production is expected to fall below the 160,600 metric tonnes last year, farmers groups say.
Zimbabwe has suspended the publication of official annual inflation data since Aug. 1, following the introduction of a new currency. In its last official figures, inflation hit more than 175% in June, its highest level since hyperinflation under Mugabe wiped out the economy in 2009.
Soaring prices have angered workers whose salaries have lagged behind inflation. The latest increase in the price of bread will only embolden calls by government employees to have their salaries indexed to the dollar.
The price of bread nearly doubled in Zimbabwe on Tuesday, another burden for citizens already struggling with a weakening currency and rising prices for basic goods. Bread now costs 3.50 RTGS dollars a loaf, up from 1.80 on Monday, according to prices displayed by most shops visited by Reuters in the capital, Harare.
“Bread has now become a luxury. How many people can afford it at this rate?” said Sarah Chisvo, a mother of three who was picking up groceries in a supermarket in central Harare. “The government needs to do something before this gets out of hand.”
Zimbabwe ditched its own currency for the U.S. dollar and other currencies in 2009, after hyperinflation reached 500 billion percent the previous year. In February, faced with acute shortages of U.S. dollars, Zimbabwe introduced a new currency, called the Real Time Gross Settlement dollar. The RTGS has been losing value ever since, forcing companies to increase prices .
Year-on-year inflation raced to 66.8 percent in March, up from 59.39 the previous month, according to statistics agency Zimstats.
On Tuesday, the RTGS dollar was trading at 3.19 to the dollar on the interbank market and 5 on the black market. That means a loaf of bread costs about 70 U.S. cents a loaf, in a country where the average income is around $4 a day.
Bread is the most consumed staple after maize meal, and the increase follows that of other products like cooking oil, sugar and milk. In January, a fuel price increase led to protests that left several people dead following a military crackdown.
While prices of basic goods continue to spike, salaries have largely remained unchanged, increasing public anger against President Emmerson Mnangagwa’s government.
Zimbabwe is suffering from the twin effects of drought and a cyclone that wrecked the eastern parts of the country. That means the country needs to import food using scarce dollars, which will put further pressure on the exchange rate and prices, analysts say.