Zimbabwean consumers Tuesday faced an increase of nearly 600% in the price of the national staple, maize meal, as the country's own maize crop was projected to fall far short of national requirements and regional and world grain markets tightened.
The state-controlled Herald newspaper quoted Agriculture Minister Rugare Gumbo as saying the state monopoly Grain Marketing Board would pay maize producers Z$3 million a metric tonne and sell grain to millers at Z$3.1 million a tonne.
He said the producer price was increased from Z$52,000 a tonne to "stimulate maize production to levels of national sufficiency in terms of food security."
Consequently, the official retail price of a five kilogram bag of mealie meal soared from Z$3,200 dollars to Z$21,874 dollars, an increase of 583%. The new prices are in line with maize prices on the parallel market, where the commodity is readily available.
Gumbo has officially declared 2007 a drought year and the United Nations Food and Agriculture Organization and the U.N. World Food Program are currently undertaking an assessment of Zimbabwe’s agricultural system and food aid requirements.
This year’s maize harvest is expected to yield fewer than 600,000 tonnes, only about a quarter of the country's annual national requirement of 2.4 million tonnes.
Zimbabwe is now beginning to take delivery of 400,000 tonnes of maize sourced from Malawi. But Malawian Finance Minister Goodall Gondwe told Reuters Tuesday that it will take six months to ship the entire consignment, which must be paid for up front at a time when increased production of ethanol fuel is driving up world corn prices.
Economist John Robertson told Blessing Zulu of VOA’s Studio 7 for Zimbabwe that the increase in grain prices is a windfall for producers – but a nightmare for consumers.
Research Director Janet Larsen of the Earth Policy Institute in Washington said maize prices are headed higher due to the increased demand from ethanol producers.
The United States provides about 70% of world maize exports - but Larsen said the amount going to U.S. ethanol distillers has tripled in five years to 50 million tonnes.