Bread prices had slumped by around $10 a standard loaf with prices in the $55 to $68 range depending on brand yesterday after the Reserve Bank of Zimbabwe ensured millers could import wheat with foreign currency supplied at the ruling auction rate.
Last week, the Grain Millers Association of Zimbabwe (GMAZ) announced that millers would reduce the price of the flour and that in future flour prices would track the standard auction rate.
Supermarkets and shops still have variations in the price of a standard loaf from the big three commercial bakers of Lobel's, Proton and Bakers Inn, ranging from $66.90 to $68.43 depending on how they apply mark-ups, with in-house brands being sold for as low as $55.
In-house brands are normally cheaper as there are no transport costs to factor in.
The bakers were being charged $3 150 for a 50kg bag of bread flour, but the millers, now able to use auction rates to import wheat, are charging just $2 136 for the same 50kg.
"There are still stocks of higher priced flour by bakers, but most are already diluting this with lower-priced flour, so pushing down prices closer to what their competitors charge.
Bakers Association of Zimbabwe president Mr Dennis Wallah yesterday confirmed that the price of bread had started going down, but said any movement on the foreign currency would affect the price .
"The reduction in the price of bread shows that our members are responsible, but any movement upward or downward in the exchange rates will affect the bread price," he said.
In future bread prices will track the auction rate, making bread the first non-subsidised essential product where prices will track the auction rate, not the black market rate.
Bread prices started soaring in May this year when Grain Marketing Board (GMB) advised millers that they had run out of wheat and millers had to import using free funds.
GMAZ chairman, Mr Tafadzwa Musarara recently confirmed that prices would be guided by the foreign currency auction outcomes.
In a few months, as the present winter wheat crop is harvested, there could be more price adjustments with the price of flour for the next year being dependent on what farmers are paid for their crop and the storage and other costs incurred by buyers, mainly the GMB.
Zimbabwe has always been a wheat importer, but this winter the Ministry of Lands, Agriculture, Water and Rural Resettlement has pushed hard to contract enough competent farmers in the hope that Zimbabwe can be self sufficient or close to self-sufficient.
The country requires around 400 000 tonnes of wheat a year at present demand.