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Consumer basket leaps to $28m
Kudzai Chawafambira, The Herald (Zimbabwe)
March 07, 2006

http://www.herald.co.zw/inside.aspx?sectid=519&livedate=3/7/2006%2012:00:00%20AM&cat=8

THE consumer basket for a family of six has increased by 28,8 percent to $28 million in the month of February, from the January figure of $21,8 million.

The basket has maintained an upward trend since the beginning of the year owing to incessant price increases, which continue to erode consumers’ purchasing power.

"The increase in the basket was largely propelled by price increases experienced throughout the month. Almost all components of the basket recorded increases," said the Consumer Council of Zimbabwe.

Notable increases were witnessed in basic commodities such as salt whose price rose by 385,8 percent to $79 750 for a 500g packet. Washing powder shot up by 107,6 percent, white sugar 25,8 percent, 1kg margarine went up by 26,6 percent to $438 500 and a 750ml bottle of cooking oil shot up by 49 percent to $256 428.

Although shortages of some basic commodities continue to persist, white sugar has been trickling into the market while roller meal has been scarce since the beginning of the year.

The consumer watchdog noted that in the last week of the month under review the price of bread increased from the gazetted price of $44 000 to between $60 000 and $66 000.

"The Government denounced the increases even though bakeries have not taken heed of the calls. Bakeries have cited imminent collapse of the baking industry if the prices are not reviewed upwards. "Therefore, the CCZ urges the Government and industry to agree on prices which not only take cognisance of the plight of the consumer but also ensure viability of various industries," said CCZ.

It was also against this backdrop that the consumer watchdog was calling on Government, business and labour --- under the auspices of the Tripartite Negotiating Forum (TNF) --- to expedite the implementation of an effective pricing and incomes stabilisation mechanism in order to come up with holistic solutions to challenges besetting the economy.

"The year started with optimism following the announcement of the agreement made by the Tripartite Negotiating Forum (TNF) partners to set up the Incomes and Prices Stabilisation Protocol but hopes have been dashed as the protocol is yet to deal with distortions in the current economic environment.

"This has left consumers in limbo since they have been kept in the dark on whether the TNF discussions will resume. The CCZ urges the parties to come up with solutions to pricing and income problems being experienced," said the consumer watchdog.

Consumers’ disposable incomes have continued to decline in the face of escalating prices with low-income earners among the hardest hit.

The hyperinflationary environment is expected to continue to erode consumers' buying power as price adjustments are now being effected almost on a daily basis.

The CCZ basket is viewed in economic circles as an accurate barometer of the cost of living for the average low-income urban worker in Zimbabwe. This means if it was adopted as the official Poverty Datum Line millions of Zimbabweans would be classified as living in abject poverty.

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