By Alois Vinga
ZIMBABWE’s staple maize meal, is set to go up with the Grain Millers Association of Zimbabwe (GMAZ), general manager, Lynette Veremu warning prevailing parallel market rates could be used to calculate the new prices.
In a statement ,Veremu said that the milling industry is in the process of engaging government on the parameters to set new prices for maize meal and wheat in line with currency trends. The GMAZ boss said most actors in the milling sector are getting foreign currency on the parallel market a development that is likely to inform the new price structure.
“The manufactures of packaging, which includes the government owned Tregers are now demanding payment in foreign currency.
“It is difficult if not impossible for millers to obtain the foreign currency on the interbank market for such a local transaction and consequently millers are now resorting to parallel market which has a premium rate currently at 1:8,” the statement said.
Added Veremu: “The milling industry is yet to adjust its prices as discussions with the Industry Ministry are being concluded. New prices, indicating the maximum recommended retail prices, will be published in all major newspapers nationwide shortly. Our monitoring teams will be in the field to promote adherence.”
GMAZ said that the current economic challenges, precipitated by exchange rate movements since last week, that saw the local currency losing its value by close to 50% have had a negative impact on the viability of the industry.
“The elimination of the concessionary 1:1 rate by the Central Bank is a welcome development as it seeks to remove market distortions.
“However, it pushes significantly the costs of imported wheat upwards. The depletion of local wheat stocks at (the Grain Marketing Board) GMB priced at RTGS$675/metric tonne entails that the country has to fully rely on imported wheat until (the next) local harvest in November,” Veremu said.
She said the price of imported wheat before duty currently stands at US$407 per metric tonne, adding that when computed at the market controlled interbank rate of 1:4,7 between the US and the local currency “wheat costs to the miller is now RTGS$1,912.90 per tonne which is an 284 % increase from GMB price of RTGS$675.”
Veremu called on government to considers wide consultations before policy implementation to reduce shock and distortions in the economy.
“We appeal to the authorities that in future, an impact assessment on basic commodities prices is done before any policy pronouncements so that business is not blamed for price increases and also avoid the need to negotiate prices of these basic commodities post facto,” she added.