Mozambique: Bakers Propose Another Bread Price Increase

The Mozambican Association of Bakers (AMOPAO) is proposing that the price of bread be increased in response to rising production costs. According to the daily newspaper “Noticias”, the government will meet with the Association over the next few days to discuss the issue.

On Wednesday, a meeting of AMOPAO proposed that a 200 gram loaf should increase from six to seven meticais, whilst a 250 gram loaf would increase from 7.5 to nine meticais.

After the meeting, AMOPAO chairperson Victor Miguel explained that the main ingredient, wheat, has jumped in price from 1,080 to 1,390 meticais for a 50 kilo sack. He added that increases in wages and the price of yeast have also affected production costs.

Miguel argued that the proposed price increases would ensure the future of bakeries after many closures due to falling profits. He stated that “this increase is not as desired, but it is feasible. Given the seventy per cent increase in production costs, which has made the situation unsustainable, the price of bread should increase by even more”.

He recalled that by the end of last year 98 bakeries had closed, and presumed that this number must have increased in the first half of this year.

The price of bread rose dramatically in October last year with AMOPAO imposing a 1.5 meticais increase for all types of bread. Thus, a 250 gram loaf went up in price from six to 7.5 meticais. Under the new proposal, this size of loaf would cost nine meticais – a fifty per cent increase in less than a year.

The main driver behind the increased costs is the depreciation of the metical. At the beginning of 2014, the US dollar was worth 30 meticais. Today the exchange rate is over 65 meticais to the dollar. Thus, while wheat prices over the last twelve months on the world market fell by almost 27 per cent when priced in dollars, import prices have risen in meticais.

Source: Agencia de Informacao de Mocambique