Bakers propose to again increase price of bread in Mozambique from tomorrow

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Bakers propose to again increase price of bread in Mozambique from tomorrow

12:26 CAT | 30 Jun 2016

National bakeries are proposing to raise the price of a 250 g loaf of bread from the current 7.5 meticais to 9 meticais from tomorrow, July 1. The 200 g loaf, currently 6 meticais, is to go up to 7 meticais.

The bakers justify the price hike with rising overall production costs in the order of 70 percent, and say that without a price rise, baking will be unsustainable.

According to the President of the Mozambican Association of Bakers, Victor Miguel, a bag of flour which cost 1,080 meticais in October 2015, costs 1,390 meticais this month in the south of the country, and more still in the north and centre.

Yeast, which last year cost 740 meticais per 10 kg, now costs 1,600 meticais. Dried yeast which was 1,600 meticais in October 2015, in June cost 2,340 meticais.

Another factor in bread production is the depreciation of the metical against the US dollar, falling from 30 meticais in 2014 to 65 meticais to the dollar now.

Bakeries report that will be up to the government to decide whether or not to accept these prices. If not accepted, the executive should present alternatives to this proposal, but the bakers warn that they can not afford to continue to produce without raising prices.

Last year, Mozambican bakeries increased the price of a 250 g loaf by 1.5 meticais after the government withdrew subsidies. According to Miguel, at least 98 bakeries closed in 2015 due to the currency crisis which, given that more than 90 percent of wheat consumed in the country is imported, increased production costs to unsustainable levels.

Source: O País