Unstable currency pushes up bread price

Source: Unstable currency pushes up bread price – NewsDay Zimbabwe

BY METHEMBE SIBANDA
THE price of bread has increased by 14,8%, with a loaf now costing $210 up from $175.

The Confederation of Zimbabwe Retailers (CZR) yesterday said the bread price hike was necessitated by instability in the foreign exchange markets.

The bread price hike came at a time when the consumer breadbasket for Zimbabweans recently went up to $73 000 monthly for a family of six, from $58 000.

CZR president Denford Matashu told NewsDay that the rise in the price of bread would influence price increases of other products due to the unstable forex market.

“It is unfortunate that the price of bread has had to go up and in many instances it has gone up a couple of times than would have been anticipated by a majority of Zimbabweans. The bread price increases have actually defined on-going price increases for other basic commodities,” Mutashu said.

“The issue of instability of the parallel market exchange rate that has arisen and the auction system closed around mid-December — much earlier than had been anticipated. That has also seen a run on the parallel market exchange rate currently at $240:US$1.”

He said the parallel market had continued to determine pricing of products, resulting in local authorities also increasing rates and licence fees, and a rise in the cost of fuel.

“While bread is predominantly sold in local currency, it makes it difficult for members of the public to afford it,” Mutashu said.

“So most of the prices actually reflect the survival mode of most companies in that they are struggling to remain afloat in an environment where cost drivers continue to pile up.”

He said due to continued increases in the price of bread, there had been a decline in the sale of the commodity in shops due to the unstable exchange rate.