Bread: Wheat flour subsidy extended by a further month – Mozambique

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Bread: Wheat flour subsidy extended by a further month – Mozambique

6:01 CAT | 02 Feb 2017

The Mozambican government has extended the subsidy on wheat flour, which was due to expire on 31 January, to the end of February, reports Thursday’s issue of the independent newssheet “Mediafax”.

On Tuesday, officials from the Ministry of Industry and Trade held separate meetings with the Mozambican Association of Bakers and with retailers who collect bread from the bakers and then sell it to the public. At the end of those meetings, the government decided to extend the subsidy for a further 30 days.

Had the subsidy really ended on 31 January, that would have forced the bakers to increase the price of bread, which has become a staple food in urban areas. Although last week the Deputy Minister of Trade, Ragendra de Sousa, suggested that bread could be replaced by cassava or by sweet potatoes, it did not take journalists long to check that in the cities both cassava and sweet potatoes are more expensive than bread.

In September 2010, price rises, particularly of bread, led to two days of rioting in Maputo. The government is not anxious for a repeat of that experience, and so is attempting to keep the price of bread down. The main trade union federation, the OTM (Mozambican Workers’ Organisation), warned this week that the rise in the cost of living, and the deterioration in the quality of life of workers, was reaching its limit.

The government re-introduced the wheat flour subsidy in July 2016, when the bakers were threatening to increase the bread price. Since then the subsidy has cost the government about 400 million meticais (about 5.8 million US dollars).

The chairperson of AMOPAO, Victor Miguel, told “Mediafax”: “We did indeed have a meeting with the government, and the government was ready to extend the subsidy”.

As for what would happen when the new deadline for the end of the subsidy runs out, Miguel said meetings will be held throughout February to study the possible next steps.

The government says it is working with its partners to ensure that, in the event of a rise in the price of bead, the poorest strata of the population will not be harmed.

Source: AIM