The Grain Millers Association of Zimbabwe (GMAZ) has taken a swipe at the skyrocketing prices of raw materials citing government failure to anticipate the negative impact of interbank market.
In a statement GMAZ said it is difficult for millers to obtain the foreign currency on the interbank market for local transaction and consequently millers are now resorting to parallel market.
“The manufacturers of packaging, which includes the government owned Tregers are now demanding payment in foreign currency. It is difficult, if not impossible for millers to obtain the foreign currency on interbank for such a local transaction and consequently millers are now resorting to parallel market which has a premium rate currently at 1:8 This has seen packaging costs surging significantly,” read the statement.
GMAZ said government failed to anticipate the impact of its policies upon promulgation, especially the fuel prices.
“The fuel prices changes have seen transport costs increasing from RTGS$80/MT to RTGS$215.00, with transporters citing other variable costs as well.
“We appeal to the authorities that in future, an impact assessment on basic commodities prices is done before any policy pronouncements so that business is not blamed for price increase and also avoid the need to negotiate prices of these basic commodities post facto,” reads the statement.
GMAZ is working on revising the Milling commodities.
“In view of the foregoing, the milling industry is yet to adjust its prices as discussions with the Minister of Industry and Commerce is being concluded. New prices, indicating the maximum recommended retail prices, will be published in all major newspapers nationwide shortly. Our monitoring teams will be in the field to promote adherence,” reads the statement.
GMAZ confirmed the shortage of grain in the country which has forced them to rely on imports.
“The depletion of local wheat stocks at GMB priced at RTGS$675/MT entails that the country has to fully rely on imported wheat until local harvest in November. The price of imported wheat is DDU (Delivered Duty Unpaid) is USD407/MT. Computed at interbank rate of circa 1:4,7, wheat costs to miller is now RTGS$1,912.90/MT, a 284% increase from GMB price at RTGS$675.00.”
On May 5 GMAZ Chairperson, Tafadzwa Musarara said they were to explore South America to import grain as the country had left with few grain to sustain the few months.
“We still have sufficient maize as evidenced by adequate supply of maize in the market and the marketing season has already started and some maize has already been delivered. For the next few months there is food secure. However, the next fortnight, in fact we have started the process of going to South America to look for grain,” he said.
GMAZ had started regulating its products but this failed when the government liberalized fuel market leading to the frequent rise of transport hence the millers intend to adjust their prices to match the cost of transport.