Food Shortages, Inflation Worsen in Zimbabwe

HARARE, Zimbabwe (AP) -- Bakeries in Zimbabwe remained closed Sunday and shop shelves were empty of bread despite a 300 percent rise in the official price of a loaf.
The state Sunday Mail, a government mouthpiece, said the National Prices and Incomes Commission allowed the bread price to increase to Zimbabwe dollars 100,000 (US 20 cents at the dominant black market exchange rate) Friday as part of a review to help businesses remain viable.
The rise came after the government slashed the price of bread by more than a half in June aimed at fighting the world's highest official inflation.
Bread, the cornmeal staple, meat and other basics then disappeared from store shelves as businesses were forced to sell their goods at below production costs.
The independent National Bakers' Association said chronic bread shortages would continue despite the price rise until flour supplies improved.
"Only a few bakers have flour stocks ... the rest are likely to remain closed,'' said Vincent Mangoma, chairman of the association.
Earlier this month, the agriculture ministry blamed daily power outages in the crumbling economy for disruption in production of irrigated wheat, with harvests two thirds of what was required.
Acute shortages of hard currency have delayed wheat imports.
Mangoma said the new bread price remained insufficient and did not include soaring costs of scarce gasoline that accounted for about 27 percent of the price of a loaf.
Gasoline is mostly sold by private dealers for the equivalent of $1 a liter ($4.50 a gallon).
The value of the Zimbabwe dollar remained in free fall in the past week, reaching up to 600,000 to $1 in black market deals. The official exchange rate is 30,000 to $1.
The government has taken over some 5,000 White-owned commercial farms since 2000 in often-violent seizures that disrupted the agriculture-based economy in the former regional breadbasket.
Last month, the government hurried through legislation forcing Whites and foreign interests to hand over 51 percent control of their businesses to Blacks.
The Indiginization and Economic Empowerment Bill has still to be signed into law by President Robert Mugabe.
New legislation proposing similar measures for Blacks to take a controlling stake of the nation's mines goes before the Harare Parliament when it reconvenes Oct. 30.
In the worst economic crisis since independence, independent estimates put real inflation closer to 25,000 percent, and the International Monetary Fund has forecast it reaching 100,000 percent by the end of the year.
Last week, the state central bank acknowledged that farming in the nation that was once a major food exporter had become a "laughing stock.''
It announced the free distribution of tens of thousands of animal-drawn plows, planters and cultivating equipment so the upcoming agricultural year would be what it called "the mother of all seasons.''
Among the range of incentives to revive food production was an offer by the central bank of a free vehicle, a family holiday in southern Africa, spending money and free fertilizer and chemicals for any farmer who produced 1,000 tons of maize.