From: wsargeant@IGC.ORG (Winslow L. Sargeant)
Newsgroups: soc.culture.african
Subject: IPS:Zimbabwe, price increases rock the
Date: 6 Apr 92 20:52:30 GMT
Article-I.D.: cdp.9204062052.AA02826

/* Written  9:04 am  Apr  6, 1992 by newsdesk in cdp:ips.englibrary */
/* ---------- "ZIMBABWE: PRICE INCREASES ROCK THE " ---------- */
Copyright Inter Press Service 1992, all rights reserved.  Permission to re-
print within 7 days of original date only with permission from 'newsdesk'.

Area: Asia, southern
Reference: Agriculture
Title: ZIMBABWE: PRICE INCREASES ROCK THE COUNTRY


an inter press service feature

by tafadzwa matimba

harare, apr 3 (ips) -- while zimbabwe's agricultural producers
have expressed happiness with the continual price increases for
their commodities, consumers are reeling under the increases.

for the past two weeks, agricultural producer price increases
have made headlines in local dailies. these have been followed
by consumer price increase announcements, setting what many
people expect to be the trend for many months to come.

''these increases are bound to raise the cost of living
across the economy,'' says the confederation of zimbabwe
industries (czi).

''this will, however, impact more negatively on those
families, particulary the lower-income rural and urban ones, who
depend on milk, beef and other related commodities for their
day-to-day sustenance.''

last month the government announced producer price increases
of between 14 and 91 percent for basic commodities including
milk, beef, margarine and cooking oil.

a 500-ml packet of milk which once cost 71 cents (14 u.s.
cents) went up by 34 percent to 19 cents.

the government says the new prices -- which have put many
essential commodities out of reach by the ordinary zimbabwean --
aim at increasing price margins which had been reduced by
increased input costs.

effects of the severe drought, which drastically reduced
normal crop and livestock volumes, have also contributed to
these increases.

in the dairy industry, for example, at least 30 percent of
the country's 600,000 commercial milk cow herd has to go for
slaughter because of drought.

these increases will most adversely affect minimum-wage
earners whose salaries are as low as 156 zimbabwe dollars
(about 31 u.s. dollars) per month.

but the prices are positive for farmers. in fact, ''the
producer prices have been very favourable,'' gary magadzire,
president of the zimbabwe national farmers union (znfu), told
ips. (more/ips)


zimbabwe: price (2)

''if the cost of inputs continues to escalate, the consumer
must know that it will affect him sooner or later,'' he adds,
saying that consumer prices are determined by producer prices.

apart from the new price increases, the government has given
marketing boards and producers flexibility to negotiate their
own producer prices.

commercial agricultural producers and industries have
welcomed this move, as well as the new producer prices.

''the producer price of 995 zimbabwe dollars (199 u.s.
dollars) per tonne for wheat indicates the government and the
grain marketing board wish to correct the imbalanced prices of
the past,'' says the chair of the zimbabwe cereals producers'
association, oliver newton, ''and the association welcomes their
understanding.''

before the new prices were announced, the wheat price was
140 u.s. dollars a tonne during the 1991/92 marketing year.

devaluation of the zimbabwean dollar has also had an effect
on prices. the exchange rate of the zimbabwean dollar has gone
down from 2.9 in april 1991 to the current five dollars to the
u.s. dollar.

the government mar. 26 increased the price of fuel by a
margins of between 1.4 and 58 percent, citing shortage of
ethanol as the reason for the move.

ethanol is derived from locally-grown sugar. the drought has
resulted in reduced sugar production, affecting ethanol levels.
up to 20 percent ethanol in zimbabwe is blended with petrol to
make blend petrol.

but because of drought, the southern african nation has to
import premium petrol which does not require blending and is
therefore more expensive than regular petrol.

announcing the new fuel prices, energy minister herbert
ushewokunze pointed out that petroleum products prices on the
world market had also increased with margins of between seven
and 47 percent -- causing an increase on the buying costs.

the czi says the petrol increases are likely to be felt only
by companies which used petrol for their vehicles. consumers of
diesel were unlikely to be affected by the fuel price increases,
czi noted. (end/ips/tm/apc/ar/92)
Newsgroups: soc.culture.african