UPDATED: Mealie meal price drops 50% . . . President’s subsidy restoration takes effect

06 Dec, 2019 - 00:12 0 Views
UPDATED: Mealie meal price drops 50% . . . President’s subsidy restoration takes effect Mealie-meal being sold on the streets of Bulawayo in this file photo

The Chronicle

Nqobile Tshili, Chronicle Reporter

THE price of mealie meal has been slashed by 50 percent with immediate effect as Government introduces a new subsidy model for the production of roller meal, the Minister of Finance and Economic Development, Professor Mthuli Ncube, said yesterday.

Prices of super refined mealie meal are however, likely to remain the same as the subsidy does not apply to it.

The development comes as a relief for most families as mealie meal had become too expensive for most households especially at a time the country is experiencing the severe effects of drought. 

Mealie meal is key in the making of the country’s staple food, isitshwala.

In a statement, Prof Ncube said a 10kg bag of roller meal which was now selling for between $95 and $105 will be sold at $50 as per agreement between Government and the Grain Millers Association of Zimbabwe (GMAZ).

“In this regard, the new subsidy model will therefore target the production of roller meal resulting in the retail price of ZWL$50 for a 10kg bag. The payment modalities for the new targeted subsidy for the roller has been discussed and agreed with GMAZ, whose members have 95 percent of the roller meal market. The implementation of the subsidy is with immediate effect,” he said.

Prof Ncube said a reduction in the mealie meal price follows President Mnangagwa’s pronouncements last week that mealie meal has to be subsidised to cushion the public against high costs of food. 

“As you may be aware, His Excellency the President Cde E.D Mnangagwa announced that subsidies on maize be restored in order to cushion the vulnerable groups of our society from the negative increases in basic food prices. Under this new subsidy model, Government will fund the procurement of grain at market prices and sell the same to registered maize millers to ensure availability and affordability of the commodity,” he said. 

 “This model will create fiscal space for Treasury to finance other social protection programmes. Government will ensure that the requisite monthly tonnage of 40 000 metric tonnes required for producing 32 000MT of roller meal will be timely availed by the Grain Marketing Board to members of the GMAZ.”

Mealie meal prices had gone up after Government stopped subsiding grain to millers, who also passed on the cost to consumers.

GMAZ media and public relations manager Mr Garikai Chaunza said following the latest subsidy, they will be selling roller meal at $45 to retail shops.

“Going forward we have communicated to our members to that effect. Millers are however, not responsible for selling mealie meal in the shops. But what we can say is that we had a meeting with Government and whatever is said in that statement will be implemented by millers. What we are going to do is to supply retailers at $45 for a 10kg bag of roller meal and only roller meal, which has been subsidised and they put their $5 mark up,” said Mr Chaunza.

A retail shop owner in Bulawayo who declined to be named said prices of mealie meal will not immediately go down as they have to first clear the existing stock which they ordered at the previous price.

 “Yes, Government has introduced a subsidy for roller meal, it’s a very welcome development. But we won’t immediately reduce our prices of mealie meal because we did not buy the stocks we have at subsidised prices. We will continue selling our stocks at the prevailing prices until we start receiving subsidised roller meal from GMAZ. Otherwise if we just implement the changes as announced we will run losses,” said the retail owner.

A snap survey in Bulawayo yesterday showed that a 10kg bag of roller meal is still going for an average $100 in supermarkets while a 5kg bag was pegged at $52. A 10kg bag of refined mealie-meal was going for an average $117.

 GMAZ chairman Mr Tafadzwa Musarara hailed the Government for introducing the subsidy saying its effect would start reflecting soon.

“Prices are expected to go down in five days from now as shops are still clearing old stock,” he said.

“The Government of Zimbabwe and the milling industry represented by Grain Millers Association of Zimbabwe have for the past few days been having intense engagement with discussion around the introduction of subsidies on roller meal. 

“This is a relatively new subsidy regime that is coming into the country and it is targeted on a particular product which is roller meal. As you are all aware, this is again pursuant to the provisions carried in the 2020 budget where the Government is committed to subsidising bread and roller meal and as millers we are responsible for the production of roller meal.”

As part of efforts to create social safety nets, Government last month removed import duty on several basic goods.

Cabinet resolved to remove controls on import permits for maize grain, maize meal and wheat flour with immediate effect and placement of wheat flour on the Open General Import Licence (OGIL).

Other products that were exempted included wheat flour in packages of more than 50kg, whose duty was pegged at 20 percent, while those packages of less than 50kg used to attract 10 percent [email protected]

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