Reduce spending on luxury goods: CCZ

the herald

Patrick Chitumba Head of Midlands Office

Many Zimbabweans are having to shop around for the best prices and likely cut back on luxury goods, as the Consumers Council of Zimbabwe (CCZ) says a family of six now needs $120,000 a month for food.

Commodity prices have increased across the world, mainly due to the ongoing Russian special military operation in Ukraine which has affected the supply of goods and in Zimbabwe there has been additional inflation due to currency and price manipulation.

In an interview, CCZ spokesperson Mr. Chris Kamba said, “Family of six bread baskets cost $120,000 as of the middle of the month (May) according to surveys.”

Consumers had to shop around and compare prices first because of the huge disparities in the cost of similar products in different stores.

“As you know, the CCZ conducts periodic surveys of commodity prices in the market, and more so during this time when there has been public outcry over commodity price increases. One of the observations of these surveys is the price disparity on the same product and consumers often want to understand the puzzling disparity between prices for similar services.

“From a consumer perspective, price disparities are both good and bad: good in that they encourage competition among players, but on the other hand they highlight the greedy and profiteering tendencies of some market players. the value chain,” Mr. Kamba said.

The CCZ, he said, has always advised consumers to shop wisely, which includes comparing prices at different outlets.

Mr Kamba said some CCZ members have since started social media groups where they advise each other on service providers who sell affordable products.

“Consumers will try cheaper brands and if the quality is acceptable, they will continue. Captive consumers are becoming a rare species and market forces will prevail, so treating customers like dummies will be bad news for service providers,” Mr. Kamba said.

The Chairman of the Confederation of Zimbabwe Industries, Mr. Kurai Matsheza, said most of the products that were traded had some level of foreign currency inflow.

“It can vary from product to product. Businesses access foreign currency partly from the auction and also from the parallel market, because we all know that the auction does not give a 100% requirement, so a mixed level of forex is different from company to company and therefore different rates between retailers,” he said.

Mr. Matsheza said that the impact of the Russian-Ukrainian conflict was significant and at present its full impact has not reached the world.

“Commodities such as wheat, cooking oil, gas, fuel and oil are among the products that have been affected. As you may know, the global supply level of the two countries for some of these primary products reaches 40% and a disruption of 40% is a huge gap.

“The longer the conflict lasts, the more damage the global economy will suffer. Zimbabwe is therefore caught in this situation because we are dependent on imports of these products. Therefore, as a country, we are not immune to these shocks,” he said.

Mr Matsheza said that in Zimbabwe inflation was driven by a number of factors such as the movement of the exchange rate both in the auctions and in the parallel market.

“Imported inflation also drives local inflation. Along with the movement in oil prices (as well as other commodities), this has fueled the local economy. Electricity tariffs have been revised upwards and this is having a huge impact on local inflation as electricity affects all sectors of our economy,” he said.

The President of the Retailers Confederation of Zimbabwe, Mr Denford Mutashu, said the parallel market rate was affecting prices of basic commodities in stores.

“Retailers end up buying foreign currency on the black market because producers currently don’t accept payment in local currency,” he said. “So, as retailers, it is difficult to make a profit if we buy in foreign currency and then sell in local currency.

“Consumers want cheap products, but the availability of foreign currency affects the retail price and that’s why there are price disparities.”

Mr Mutashu said the Russian invasion was affecting oil and even grain not just in Zimbabwe but across the world.

“That’s why even in Zimbabwe there is a spike in the prices of goods and commodities. Globalization is kicking in, Zimbabwe is not surviving in isolation and right now oil and wheat production and delivery are affected by war,” he said.

“Other countries where we used to buy oil from the Middle East and Asia have stopped imports and are focusing on feeding their own people and that’s a problem for countries like Zimbabwe. .

“We have our local inflation and we also have imported inflation which is aggravated by the fact that we import products. It is therefore necessary to revive our industries, maximize the mining, agricultural and manufacturing sectors and push beneficiation and value addition so that we earn more foreign exchange.

Mutashu said wholesalers and retailers are in a difficult situation due to the exchange rate, which comes in the form of auction rate, interbank rate, market rate black and other exchange rates that come into play as retailers consider using the swipe, Zimbabwean dollar. , wire transfer in US dollars or cash in US dollars.

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