HomeBusinessMillers threaten price hikes, shortages

Millers threaten price hikes, shortages

Millers are threatening to hit back at government for giving the green light and seeking to enforce the Food Fortification programme that could see the price of flour and eventually bread go up, Standardbusiness has learnt.

BY TATIRA ZWINOIRA

Health and Child Care minister David Parirenyatwa
Health and Child Care minister David Parirenyatwa

The threat is a reaction to minister of Health and Child Care David Parirenyatwa’s negative response to a letter written to him by the Grain Millers’ Association of Zimbabwe (GMAZ) dated May 11 seeking at least a postponement of the programme until certain challenges, especially the availability of foreign currency, are addressed.

The World Health Organisation (WHO) and the Food and Agricultural Organisation (FAO) of the United Nations define food fortification as the practice of deliberately increasing the content of essential micronutrients.

Local millers say such a practice, while welcome, was difficult to put in place owing to challenges that come in the way of the procurement of the essential micronutrients.

In the letter, GMAZ asked the minister to postpone the Food Fortification Programme on the grounds that the nutrients required in the making of bread were sourced from outside the country, which was difficult considering the prevailing foreign currency challenges.

A miller who requested to remain anonymous told Standardbusiness last week that Parirenyatwa seemed bent on ignoring the liquidity challenges in the country.

“How can he say the issue of foreign currency is another thing? Does he not know of the foreign currency challenges that are in the country? He must be mad! This programme was not even shared with the public. Why does he want to adopt something that has not been fully explained to the consumers?” he said.

“Anyway, millers were expecting this kind of response and will take the appropriate steps. We will approach the attorney general’s office to seek an overruling of Statutory Instrument 120 of 2016. They should work on unveiling foreign currency to allow millers to be able to import wheat and maize and not come up with this nonsense! We import at least 500 000 tonnes of wheat and 1,5 million of maize a year.”

The threat from the millers is buttressed by what GMAZ has already mentioned in the letter to Parirenyatwa which spoke of possibilities of bread shortages if their request was not met.

“We feel the timing of the commencement of the mandatory programme must be postponed until such a time where all requisite variables are in place. Proceeding with the programme on July 1 2017 as you had earlier planned, with the status quo, will result in serious shortages of maize meal, bread and other household food requirements,” GMAZ said.

GMAZ, however, said that they supported the Food Fortification Programme and were not adamantly against it but were merely saying it needed reconsideration.

The Food Fortification Programme went into effect at the start of this month with full implementation set for July 1.

This is not the first time that the threat of prices of flour-related products going up have come up. Back in April this year, bakers made a thinly-veiled threat of price increments on bread, blaming it on the 12% exchange rate losses and high service fees.

At the time, the threat was forced by inadequate United States dollars needed to purchase flour products outside the country.

Now, with millers joining bakers on calls for price increments, the chances of prices going up on products such as flour, maize meal and eventually bread are now even higher.

Currently, the average prices for a 10 kilogramme [kg] packet of mealie meal is between $6 and $8 while for a 2kg flour packet, it ranges from $1,50 to $2,15. Bread currently costs an average of 90 cents per loaf.

National Bakers Association of Zimbabwe president Ngoni Mazango said on Thursday that as an association, they were still to formulate a position in response to these developments.

However, he offered his opinion on the matter of price increments saying engagement was needed.

“All that I know is that it is not right for the country to have millers increasing their prices; neither is it right for the bakers association. But look, I believe in engagement. People should engage and come up with a solution, that is what I will say for now,” he said.

“Looking at the economy of this country at the moment, it is not the right thing to be increasing prices. Zimbabweans are suffering already and there is no disposable income. We have seen companies closing down and all that. People are losing their jobs and there is no way we can embrace price increases. This is my opinion.”

He added though that the problem of foreign currency needed engagement.

Consumer Council of Zimbabwe executive director Rosemary Siyachitema was not available to comment on the issue.

The Food Fortification programme is backed by Statutory Instrument 120 of 2016.

Both WHO and FAO have been actively advocating for countries to adopt the Food Fortification around the world since last year based on research they found.

That is the reason why government supports the implementation of the Food Fortification Programme as the WHO research has shown that it greatly benefits children by boosting vitamins and minerals in the body at an early stage.

Economist Kipson Gundani said it was a complicated matter in the sense that these were health requirements but at the same time, the issue of foreign currency challenges could not be ruled out.

“You then discover that it is actually a legitimate plea from the grain millers to call for the postponement. However, the issue of external payments is beyond both the ministry of Health and millers so even if you are going to postpone, you will do it eventually,” he said.

“Health issues are very delicate, something which we cannot dice with. This is also a requirement coming from the World Health Organisation, so that should be given because you are talking about something that goes into the stomach of a person. On the other hand, it is a fact that external payments are not moving and our nostro positon is poor.”

As it is, millers could probably only argue their case with the central bank demanding priority one of the Foreign Currency Priority list.

They could argue that the nutrients are a raw material since it is now a requirement that could not be sourced locally.

But, in order to do that, the ministry of Health would have to classify these nutrients under health or as food substance that cannot be found locally.

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