Bread shortages, price increases imminent as Lobel’s shut-down looms

BULAWAYO – Lobel’s bakery on Tuesday indefinitely closed its Bulawayo plant, just days after shutting down its Harare operation.

Officials at the bakery said they had exhausted their flour stocks and had not been able to secure new supplies owing to a severe United States dollar crunch, made worse by unviable bread prices.

Fifteen-hour daily power cuts have also taken their toll on Zimbabwe’s oldest bread maker, which employs about 500 people in Bulawayo and 900 in Harare.

“We have been told to stay home and wait for more news,” a Lobel’s employee said.

Bakers Inn, the country’s biggest bakery, has reduced production by over 80 percent and is expected to announce a price increase within days. A loaf is expected to sell for RTGS$6, up from the current RTGS$3.50.

Oceans Foods, which has a bakery division, said it had raised the price of bread to RTGS$5 “provisionally”, and expected another upward adjustment.

An Oceans Foods official told ZimLive: “The price of packaging is now RTGS 45c, the clip that locks your bread bag is RTGS 15c, distribution costs are now at minimum RTGS 40c per loaf. Just these three before the actual production costs puts the price of bread at RTGS $1.

“It’s no longer viable to sell bread at $3.50. We have provisionally put ours at RTGS$5, but the viable price is RTGS$7.”

Bread shortages are expected to be felt across the country in the coming days.

In Victoria Falls, shops are selling bread in United States dollars. Big supermarkets like OK and TM Pick n Pay rarely have bread on their shelves.

In Harare, some shops were demanding cash payments for bread.

The Grain Millers Association said wheat stocks have “drastically” declined, and a lack of foreign currency was impeding imports.

There are wheat consignments at Beira port in Mozambique and a warehouse in Harare – but these would not be released before payment.

Bakers sell their products in the local RTGS and without access to foreign currency, they cannot directly pay for their own imports and must rely on millers who get priority foreign currency.

“We are constantly updating our key stakeholders who include bakers on the obtaining situation,” said Garikai Chaunza, media and public relations manager for the millers. “We are also jointly working with the bakers in engaging the authorities on a number of issues that would improve bread supplies.”

Source: ZimLive