Government says no to bread price hike; bakers must buy cheaper wheat outside Mozambique

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Government says no to bread price hike; bakers must buy cheaper wheat outside Mozambique

2:43 CAT | 05 Apr 2016

The Minister of Industry and Trade of Mozambique, Max Tonela, yesterday discounted the possibility of a further increase in the price of bread, contrary to claims expressed in March by the Mozambican Association of Bakers.

Last month, the baker’s association announced its intention to raise the price of bread for the second time in less than six months, citing an increase of 25 percent in the cost of wheat, with a 1,040 metical bag now costing 1,290 meticais.

“If there is no other alternative, of course we will have to raise the price, unless we want to see our companies close doors,” the association’s president, Victor Miguel, said at the time, pointing to the bakers who have already closed down, mainly in the centre of the country, because the business is unsustainable.

At a press conference during a visit to Moamba in Maputo province, Minister Tonela said that the government had initiated contacts with the bakery sector and had succeeded in halting the hike.

“As the government, we have been working with the parties involved in the production of bread to avoid a price increase, and no price hike is now expected,” he said.

The bakers, Tonela said, had worked to identify cheaper sources of wheat outside of the country, as domestic flour mills charge high prices that are passed on to the cost of bread.

The last time the country saw a rise in the price of bread was in October 2015, when a 250 gram unit rose from 6 meticais (EUR 0.12) to 7.5 meticais (EUR 0.15), 200 grams increased from 4.5 meticais (EUR 0.09) to 6 meticais (EUR 0.12) and 150 grams from 3 meticais (EUR 0.06) to 4.5 meticais (EUR 0.09).

In Mozambique’s urban areas especially, bread is a basic foodstuff and increases in its price, along with other goods, led to popular uprisings in some Mozambican cities in 2008 and 2010.