The price of bread is set to rise next week to $4 a standard loaf if bakers get their way.

Bakers say the hike is due to the prevailing black market rate of the United States dollar against the bond note.  The Sunday Mail reports that the cost of bread will increase from $1,10 to $4-$5 as per last week’s black market rates.

However, some in the baking sector are shocked by this as Government meets the bulk of their input requirements, while other key cost drivers – like labour, water and electricity – have remained constant.
 NBAZ president Mr Ngoni Mazango confirmed a hike in bread prices was imminent. “As an industry, we have a challenge of foreign currency like other industries as well. We are not getting enough (foreign currency) allocations from the Reserve Bank,” he said.

“As a result, the cost of raw materials has gone up. People are asking in either US dollars or some are multiplying using current exchange rates, which have shot up. That poses serious viability challenges to the industry.

“(The price of) flour might have moved slightly from about $31,50 to around $36,50 per 50kg bag, but bread is not made by flour alone. We do not manufacture bread fat here in Zimbabwe; there are also enzymes, spare parts for our plants and even for service vehicles, which are also imported or bought with foreign currency. 

“We require between $4 million and $7 million United States dollars each month and we are getting 20 to 30 percent of that.

“We are still consulting (on the price of bread), the problem is we have to cost our bread in US dollars and it is costing us in the range of US$1 to US$1,10 (to produce a lead).

“If we don’t get the forex and you apply the current prevailing parallel market rates, a loaf should be around $4 to $5. But we are saying if the Government can allocate the same money to us the price should come down.”