Bread shortage looms as millers threaten halt flour production; bakers also want to sell in US$

Business National

ZIMBABWE is facing an acute bread shortage after millers threatened to stop producing flour due to scarcity of wheat while bakers are pushing for permission to sell bread exclusively in US dollars.


Currently the millers and bakers are at loggerheads with the Reserve Bank of Zimbabwe (RBZ) over forex allocation backlog.


They are arguing that if they can sell the commodity in US$, the business could become viable.


Sources in the industry said there is a serious backlog regarding forex payments which had climbed to US$5 million.

This backlog is for wheat already supplied by millers to bakers.


The idea was to ensure that RBZ allows them to sell bread in US$ since 60% of the flour is for bread and 40% for other products like biscuits.


They also argue that they pay for fuel and other ingredients in US$ and want to follow suit but the RBZ, the sources said has remained adamant that bread and flour will not be sold in US$ because of fear of rapid dollarisation.


This came out at a meeting held on June 17 between senior RBZ officials, bakers and millers which ended in a deadlock.


Principally the central bank expressed concerns that since bread is the most frequently purchased commodity, dollarising it would automatically mean the country has dollarised and unions will push for US$ salaries.


Sources in the milling and baking industry criticised their principal representative, GMAZ chairperson Tafadzwa Musarara for failing to push their agenda.


β€œWe met and agreed that Musarara was supposed to advise authorities that we should commence the sale of flour and bread in USD just as has been done with fuel so that we can be self-sufficient however it appears he was sweet talked and came with nothing.


β€œIt is now two weeks since that meeting and we have had no movement, we have secured 20 000 tonnes of wheat which is already in the country and can only be released once payment is made,” the source said.


Efforts to get a comment from Musarara were fruitless as he was said to be in Zambia.


Wheat reserves have significantly plummeted over the past weeks with top millers having already stopped milling.