Bread prices drop to $66 today for a standard loaf from between $71 and $80, following an agreement yesterday that millers can buy the currency to import wheat from the Reserve Bank of Zimbabwe at the auction rate.
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 the Grain Millers Association of Zimbabwe that GMB had run out of wheat and millers had to import using free funds.
Millers then priced flour using the black market rate.
Over the past eight weeks, bread prices moved from $18 for a standard loaf, when wheat was imported at a GMB price, to the current $71 to $80 depending on how shops applied mark ups.
Cakes and similar items, and biscuits, that are largely baked from wheat flour, also increased in price.
Addressing the media in Harare yesterday, chairman of GMAZ Mr Tafadzwa Musarara said from yesterday, the prices would be guided by foreign currency auction prices.
“The price of bread, a necessity in all households had become expensive and indeed worsened the cost of living. Following the re-establishment of the foreign currency auction system by the RBZ, GMAZ has had fruitful discussions with the RBZ Governor Dr John Mangudya whereupon foreign currency allocations to millers are now being made.
“As a result, on behalf of wheat millers, I am pleased to advise that the cost of bread flour, with effect from July 3, 2020 has been reduced from $3 150 per 50 kilogrammes to $2 136,89.
“Consequently, the bakers have committed to reduce the price of a standard loaf of bread from wholesale price of $70 and retail price of $79 to wholesale price of $59 and retail price of $66. From now on, our prices will be guided by the foreign currency auction outcomes,” Mr Musarara said.
He said GMAZ would continue with private wheat imports to ensure the nation has enough supplies.
Bakers Association of Zimbabwe president Mr Dennis Wallah, however, professed ignorance of the development saying he was yet to get the communication.