THE Reserve Bank of Zimbabwe (RBZ) says bakers are expected to reduce the price of bread following an agreement it has reached with the National Bakers Association of Zimbabwe that the association’s members will access full forex requirements at the weekly auction system.
At the beginning of this month, the retail price of bread increased to an average of $650, a standard loaf from about $370 in April and the National Bakers Association of Zimbabwe (NBAZ) attributed the upward price review to cost drivers such as fuel and bread flour.
The runaway parallel market exchange rate, widely used as a source of foreign currency by some economic agencies could have played a role in the continued increase in the price of bread.
The parallel market exchange rate has depreciated from $220 per dollar to approximately $550-$600 leading to economic agencies pricing their products in line with the movement.
NBAZ members have also not been able to access foreign currency at the RBZ weekly forex auction platform to meet their import requirements.
In a statement, RBZ advised the public that it held a consultative meeting with NBAZ last Friday and deliberated on the cost build-up in the bread value chain.
“Taking into account the submissions by the bakers’ association and the need to stabilise the price of bread, the bank agreed with the bakers’ association that its members would access their full requirements of foreign exchange through the weekly foreign exchange auctions for importation of inputs and procurement of fuel for the distribution of bread across the country.
“In view of the positive engagement with the bakers’ association, it is expected that members of the bakers’ association will review the price of bread downwards,” it said.
“Going forward, the price of bread will be adjusted on account of economic fundamentals that include global price trends of inputs and the movement of the foreign currency exchange rate.”
At last Tuesday’s auction, the Zimbabwe dollar traded at 344,01 against the United States dollar