Mozambique: Government Promises No Increase in Bread Prices

Maputo – The Mozambican government has rejected calls from bakers for a further increase in the price of bread.

Speaking on Monday, during a visit to Moamba district, about 60 kilometres northwest of Maputo, the Minister of Industry and Trade, Max Tonela, assured journalists that there is no price increase in the pipeline.

“We are continuing to work on managing the price of bread”, said Tonela. “The purpose of what we have been doing with the bakers is to prevent the price from rising in the near future.

For now, we are not forecasting any increase”.

Tonela said that, in a recent meeting the government held with those involved in making and selling bread, “we received guarantees that there is still room to maintain the current price”.

The government had worked with the Mozambican Association of Bakers (AMOPAO) and had concluded that there is still space in the market to aquire a 50 kilo sack of wheat flour for 1,000 meticais (about 20 US dollars, at current exchange rates), although some milling companies are selling a sack of flour for 1,290 meticais.

Tonela added that the government is also working with consumers’ associations to protect citizens by ensuring that bread is sold at the right price for the right weight. Scales are being installed to check the real weight of bread sold in bakeries.

The last price increase was in October, when bakers raised the price of their bread by between 25 and 50 per cent.

In absolute terms the rise was the same – 1.5 meticais – for all types of bread, regardless of size, which explains the disparity in the percentage rises. Thus a standard 250 gram loaf sold previously for six meticais, in October cost 7.5 meticais (a 25 per cent rise). A much smaller loaf, weighing 150 grams, which used to cost three meticais was now selling for 4.5 meticais (which is a 50 per cent increase).

AMOPAO Chairperson Victor Miguel justified the price hike on the grounds that there had been no increases in the price of bread since 2008.

In fact, the bakers attempted to raise the price by 30 per cent in 2010. This coincided with several other price rises, notably for water and electricity, and triggered two days of serious rioting in Maputo on 1-2 September 2010. When the government intervened, the price rise was cancelled. The government compensated the bakers by introducing a subsidy on wheat flour.

Although AMOPAO described the new prices as “obligatory”, not all bakers belong to AMOPAO, and the association has no power to impose prices. As a result, there are wide variations in price, with some bakers selling for less than the AMOPAO price, and some for more.

Despite Tonela’s optimism, last month AMOPAO insisted that the bread price should rise again because of increased wheat prices.

Mozambique grows very little of its own wheat, and so the great majority of wheat used to bake bread in imported.

In fact, when expressed in dollars, the wheat price has fallen since October. But the sharp depreciation of the metical in late 2015 means that importers are paying more meticais for their wheat than they were six months ago.

Source: All Africa