The Grain Millers' Association of Zimbabwe (GMAZ) has announced it was stopping, with immediate effect, the production of subsidised roller-meal after the Grain Marketing Board (GMB) increased the price of maize it supplies to millers by nearly 100%.
The millers are scared of pushing the price to the consumer and in fear of a massive backlash, they have decided to stop production raising fears the commodity will soon be in short supply.
Last week, the GMB hiked the price of maize supplied to millers from ZW$6 957 to ZW$12 329.72 per tonne forcing GMAZ to immediately halt milling and supplying subsidised roller meal to retail shops.
In an internal memo addressed to GMAZ national executive committee members, which is in the possession of this publication, the association said they feared a severe backlash from consumers of the staple food if they increased prices in response to the GMB increases.
As a result, the millers have decided to stop milling and supplying roller-meal until the government gives a new directive.
"The price of maize has moved from ZWL 6.958, 00/MT (metric tonne) from Grain Marketing Board to millers to ZWL12.329,72/MT, which is a 77.2% upward movement," Lynette Veremu GMAZ general manager wrote in the memo.
"GMB maize collections are picking from Bulawayo, which means millers in the Midlands, Masvingo, and Harare are picking from Bulawayo, increasing the transport cost by ZWL1. 833.00/MT.
"In light of the aforementioned, the price of mealie-meal has moved from ZWL135.00 per 10kg bag to ZWL303.11 per bag which is 125% upward movement. The new price of maize has been revised upwards without increasing current subsidy of ZWL72.50 per 10kg bag."
Veremu added: "Should millers proceed to adjust prices of maize-meal accordingly at the current subsidy level, the new prices will be miller to retail ZWD230.61 and retail to consumer ZWD 260.59. In the light of lack of clarity on new subsidy and fear of consumer backlash, millers have decided to halt supplies until government gives direction.
"Regrettably, this new development violates the price moratorium agreement currently in subsistence."