NewsSouthern AfricaZimbabwe registers low bread consumption amid low wheat production


Posted on Thursday, 02 April 2015 15:09

Zimbabwe registers low bread consumption amid low wheat production

By Nqobile Bhebhe

Zimbabwe's bread consumption has declined to 850 000 loaves a day from 1, 5 million loaves five years ago.

The slump in consumption has been blamed on the deepening economic crisis in the country that has spawned massive job losses.

National Bakers Association of Zimbabwe president Givemore Mesoemvura said the more than 250 players have installed capacity of two million loaves per day but cannot operate at full capacity due to poor demand.

"We have an installed capacity of two million loaves per day, but due to economic challenges production is now at 850 000 loaves per day," he said.

"In 2010 production stood at 1,5 million loaves."

Mesoemvura said big bakers constitute 2% of the sector and hold 85% of the market share.

Medium and small bakers share the rest and constitute 98% of the market in the baking sector.

The sector imports 75% of its wheat which translates to $1 million every year.

Zimbabwe requires between 350 000 and 450 000 tonnes of wheat per year but production has been on the decline due to a myriad of challenges.

Bakers recently reduced the price of bread form a $1 to between 85 and 90 cents.

Farmers have complained that the cost of wheat production is too high and returns based on local prices were too low to allow for viability.

However, Bankers Association of Zimbabwe senior economist, Sanderson Abel said it was difficult to support wheat farmers with capital because of lack of security on land.

He argued that bankers were supporting tobacco farming because of the orderly marketing in the industry, which allowed financial institutions to recover loans.

The baking sector contributes 2,5% to Zimbabwe's gross domestic product and employs 3 500, down from a peak of 6 000.

A trade deficit is harmful to the current account balance, which is this year projected to deteriorate from a deficit of $3,351 billion in 2014 to $3,431 billion.

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