Jennifer Dube
25 November 2007
A PRICE wrangle between the Grain Marketing Board and millers is reportedly behind the bread industry's failure to improve supplies for three months since winter wheat harvests began in September, industry sources said last week.
In an interview with Standardbusiness, the GMB's newly appointed chief executive officer, Albert Mandizha, confirmed there was "some reaction to the price shift".
Sources said the production line was stalled when millers reacted against the parastatal's recent decision to scrap the wheat subsidy.
They said of the 6 000 tonnes released by the GMB so far, the millers had only picked up 2 000 tonnes, hardly enough to satisfy the demand for bread for two days.
Early this month, the GMB asked the government to either carry the subsidy or allow the parastatal to sell wheat to millers at the purchasing price, plus a mark-up.
The GMB was buying wheat from farmers at $71.5 million a tonne and selling it to the millers at a subsidised price of $ 238 000 a tonne.
It is understood the government authorised the GMB to sell at the buying price plus a mark-up, much to the fury of the millers.
"They (millers) are not buying the wheat. They are saying they are still looking for the money," sources said.
Mandizha would not elaborate on the issue, saying he would only be able to issue a "fuller" comment once negotiations were concluded next week.
"Yes, there was some reaction from the millers but we are still negotiating with other stakeholders, including both the millers and the National Incomes and Pricing Commission," he said."We are still trying to finalise a number of things and I will only be able to issue a fuller comment after the meetings."
At the beginning of this month, the GMB said about 20 000 tonnes of winter wheat had been delivered to its silos.
Meanwhile, sources said the bakeries also locked horns with the government over the newly-gazetted price of bread, saying the increase was insignificant, demanding it be reviewed upwards.
The NIPC recently announced a 100% increase on the bread price from $100 000 a loaf to $200 000. It is estimated production currently costs $500 000 a loaf.
Sources said despite the winter wheat harvest, scarcity of flour was now the major challenge for bakers.
While the government gazetted price for flour stands at $111 million a tonne, bakers are getting flour at prices of between $800 million and $1 billion a tonne on the black market.
It is understood that some bakers are importing flour from Malawi where they pay as much as $150 million a tonne.
Others, among them Bakers' Inn and Superbake, have ceased operations for more than one month.
National Bakers' Association chairman Vincent Mangoma confirmed the shortage of flour was affecting the industry but said the association was confident a solution was imminent.
"We are negotiating with the NIPC and they are very understanding," he said. "The Governemnt is also trying to help us obtain cheap fuel from the National Oil Company of Zimbabwe and some funding from the Reserve Bank"
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