The price of mealie meal has gone up a with a 10kg bag selling at ZWL$100 after the government reportedly removed subsidies on grain with immediate effect.
The removal of the subsidies is a month ahead of schedule as announced in the 2020 budget statement.
This will have a huge bearing on the cost of living for a majority of people.
According to Minister of Finance Prof Mthuli Ncube, January 2020 was earmarked for removal of the existing grain marketing subsidies for maize and wheat.
Prof Ncube said the current subsidy policy whereby the government funds the procurement of grain at market price and sells it to registered grain millers at subsidised prices, has been open to abuse and placed a huge burden on the fiscus.
He noted that in some instances the intended beneficiaries do not enjoy the benefits of the subsidy.
“To address these distortions, Government, will, with effect from January 2020 remove the existing grain marketing subsidies for maize and wheat, that were being provided to Grain Millers through the Grain Marketing Board.
“The intervention will see GMB selling wheat and maize at market prices, with Grain Millers having an option to either import or purchase grain from GMB. This means the prices of basic commodities such as bread and mealie meal may adjust”.
However, a survey conducted by CITE on Monday revealed that the price of the commodity had been adjusted upwards.
In a memorandum dated 23 November under reference number ADV004, the Grain Millers Association of Zimbabwe (GMAZ), said were left with no option but to increase maize price.
Reads part of the letter “The Government of Zimbabwe has with immediate effect removed subsidies on grain resulting to the price of GMB maize to ZWL4 000,00MT.
“In light of the above price movement, the price of roller meal shall be RTGS89,96 per 10kg bag.
“The traditional margin for the miller to retailers is 13%, thus giving a retail price of RTGS101, 66 per 10kg bag”.
However, the association added that “each miller is free to charge according to their cost structures”.
Most retail outlets within the central business district have effected the new price structure.
A 10 kg bag was retailing for between ZWL$55 and ZWL$65 depending on the brand.
However, as most basic commodities, cash price differs from mobile money payments.
Statistics from Zimbabwe National Statistics Agency (Zimstat) show that an average Zimbabwean family spends at least ZWL$1 617 on food and non-food items a month at a time when earnings have been eroded by runaway inflation.