Retailers Hike Prices Of Basics

Retail prices of basic goods have significantly gone up over the past month, with analysts blaming it on exchange rate developments.

The Daily News reports that prices of basics have gone up by between 20 per cent and 100 per cent:

… a two-litre bottle of cooking oil, which was selling at around $7 has increased to $11, 49, while two kilogrammes (kg) of flour now retails at $7, 19 from $5, 45. A 2kg packet of rice has also gone up from $5, 70 to $6, 49, with a kg of salt fetching $1, 89 from $1.

The price of sugar has also gone up from $2(sic) per 2kg to $5, 29 with 10kg of mealie-meal now going for $9, 99.

An economist, Kipton Gundai spoke to the Daily News on the development. He said:

The price of commodities is a result of the interaction between supply and market demand. Price increases can be best described under two scenarios: when there is a surge in demand and if there is undersupply of commodities.

In the Zimbabwean case, we discover that there is what we call pull-demand; there is a lot of liquidity in the market chasing too few goods.

This is because, since January, some companies have been adjusting their employees’ salaries, which has increased the buying power against disrupted production.

More: Daily News