Some bakers are said to be in the process of increasing the price of bread from $1.10 to between $4 and $5.
According to the state-controlled Herald newspaper, bakers are claiming that they are making a loss due to the fluctuating rate of the local bond note against the United States dollar.
The bond note is currently trading at 4 to the U$1 while the government insists that the two are equal.
The newspaper quoted Ngoni Mazango, president of the National Bakers Association of Zimbabwe, as saying that the cost of inputs for making bread have skyrocketed owing to the devaluation of the bond note.
Mazango said this was weakened by shortages of foreign currency to import wheat and other commodities though the cost of electricity, water and several items has remained unchanged.
He said, “(The price of) flour might have moved slightly from about $31,50 to around $36,50 per 50kg bag, but bread is not made by flour alone. We do not manufacture bread fat here in Zimbabwe; there are also enzymes, spare parts for our plants and even for service vehicles, which are also imported or bought with foreign currency.
“We require between $4 million and $7 million United States dollars each month and we are getting 20 to 30 percent of that. We are still consulting (on the price of bread), the problem is we have to cost our bread in US dollars and it is costing us in the range of US$1 to US$1,10. If we don’t get the forex and you apply the current prevailing parallel market rates, a loaf should be around $4 to $5. But we are saying if the government can allocate the same money to us the price should come down.”
Zimbabwe’s Finance Minister Mthuli Ncube has been quoted as saying that the bond note is pegged at the same rate as the United States dollar. This has been widely criticized by captains of industry who claim that the two are no longer at par following an announcement by Ncube in his maiden speech that there should be separate bank accounts from the United States dollar and bond notes.