Source: Import ban triggers price hikes, shortages | The Financial Gazette October 13, 2016
THE decision by government to ban a number of imported products has triggered price increases and moderate shortages of mostly basic commodities.
Effected in June this year through Statutory Instrument 64 of 2016 (SI 64), the ban has effectively curtailed competition from foreign players, inadvertently increased the cost of living.
Statistics released by the Consumer Council of Zimbabwe (CCZ) indicate that the cost of living went up by 0,09 percent to US$567,91 by the end July 2016.
This suggests that there has been a general increase in prices of food items that constitute the consumer basket.
The cost of living is determined by assessing an average low income urban earner’s monthly basket for a family of six.
“As CCZ, we assume that the slight increase (in prices) is due to the import ban, which was imposed by the government,” said the consumer watchdog.
“The competition in the country has been reduced, hence retailers tend to increase prices,” CCZ added.
Increases in prices were recorded in tea leaves which went up by US$0,04 to US$1,79; mealie meal by US$0,40 to US$10,80 per 20kg bag; salt by US$0,03 to US$0,23 per kg; washing powder by US$0,20 to US$1,45, and laundry bars by US$0,06 to US$1,05. The price of detergents increased by 6,8 percent to US$11,31 from US$10,59 recorded in June.
Prices of other basic commodities, which include sugar, bread, milk, flour and meat remained relatively unchanged.
A decrease in prices was recorded in margarine by US$0,04 to US$0,85; cooking oil by US$0,05 down to US$1,35 per 750ml; rice lost US$0,06 to US$1,59 per 2kg; tomatoes fell by US$0,15 to US$0,65; onions tumbled by US$0,05 to US$1,20 a bundle; cabbages by US$0,05 to US$0,65 a head; and bath soap by US$0,03 to US$0,69.
Of major concern to consumers is that a number of basic goods are disappearing from supermarket shelves as the effects of the import restrictions begin to manifest.
Brand choices of commodities are running thin for crisps, cooking oil, tissues, tinned foods, drinks, pampers for children, sanitary wear and rice.
In most shops retailers have only one variety or two for consumers to choose from.
It is feared that the shortages could spark panic buying.
With the manufacturing industry struggling to access capital to retool and import raw materials due to the liquidity crunch which has resulted in delayed transfers to suppliers, the situation is unlikely to change anytime soon.
Confederation of Zimbabwe Retailers (CZR) president, Denford Mutashu, confirmed that there were certain products that were not being found on shelves but assured the public not to panic as efforts were being made to get the foreign manufacturers of such goods to set up production plants in the country.
Confederation of Zimbabwe Industries president, Busisa Moyo, said some products could be missing from the shelves because many companies were currently busy retooling, increasing production and looking at how they could satisfy local demand.
He said some sectors have seen orders going up by 50 percent after government restricted the importation of certain products to boost local industries.
“It’s a positive impact. In general, for those companies on SI 64, we understand that orders are up 30 percent to 50 percent as result of that. So all we encourage is that those companies that are supported under SI 64 must be prioritised in terms of payment because foreign payments can constrain production. So we need assistance in that regard,” he said.
In defending the introduction of the statutory instrument, Industry Minister Mike Bimha said it was vital for government to protect struggling industries that were operating at an average 35 percent of capacity.
He said the import ban was temporary, adding that its purpose was to support retooling and capitalisation of local firms but with time local companies would have to face competition in the global market.
The SI has been condemned by mainly cross-border traders, while South Africa has also retaliated by requesting for a revision of numerous tariffs of goods Zimbabwe exports to that country.
Manufacturers in Zambia also called on their government to consider increasing taxes on imports from Zimbabwe in order to create a “level playing field” following the neighbouring country’s decision to restrict imports.
The Zambia Association of Manufacturers said it was not happy with Zimbabwe’s decision to impose import restrictions as it was being unfair to other countries.
COMMENTS
Imported butter – $5. Local butter – $7. I rest my case.
Yes and many more Imported Long life milk $1.30/lt, Local Dairybord reconstituted powdered milk (steri-milk) $1.40/lt.
by the way retooling takes more than a day and can take years, bigger problem is NO FOREX to pay for retooling, NOW Imagine that. We cant find money to pay for imports WHERE OH WHERE do we suddenly find money for retooling.
STUPID.
AH FOUND BUTTER Tulip imported from RSA $3.99 in Tm supermarkets stacked next to it DenDairy butter 6.59 both 500grms.
Margerine more expensive than butter.
and oh only flavourless (although Colourful) local biscuits no decent biscuits.
“If goods cannot cross borders, armies will.”