Maputo — The Mozambican government is negotiating with Argentina for supplies of wheat at fixed prices.
According to the Minister of Industry and Trade, Armando Inroga, speaking at a Maputo press conference on Thursday, the purpose is to guarantee the stability of wheat prices, and reduce the burden of the current subsidy that the government pays to bakers in order to keep bread prices low.
Attempts to increase domestic wheat production have so far not been very successful, and so the bulk of the wheat consumed in Mozambique is still imported, and the price fluctuates.
The government believes that a deal with Argentina could keep prices low.
Inroga said he expected negotiations to be concluded by June. In that month a delegation from Argentina could visit Maputo, or a Mozambican delegation could visit Buenos Aires to seal the agreement.
“This will be advantageous to Mozambique since we will have wheat at accessible prices, and it will give Argentina a guaranteed market”, said the Minister.
After riots in Maputo on 1-2 September 2010 against rises in the price of bread, the government brought the price down again by subsidising the bakers. This has kept the price of a standard 250 gram loaf of bread at five meticais (17 US cents).
The 2012 state budget included a sum of 615.3 million meticais for the wheat subsidy. However, by 30 June, only 39.8 million meticais of this subsidy had been spent, thanks largely to the fall in international wheat prices.
Inroga guaranteed that the price of bread will remain stable throughout 2013.