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BREAD PRICE GOES UP

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MBABANE – It appears as though consumers are in for tough times.


Hardly 24 hours after an increase in the cost of fuel was announced, it has emerged that an increase in the price of bread is also to be effected.
The price increase of bread follows the revocation of Legal Notice No.196 of 2016, which revokes the retail price of bread which will cost the consumer about 30 cents more.


Basically, bread is a staple breakfast food for many households, which means households will be absorbing a E108 increase annually on the price of bread. That is if they buy a loaf daily.


Economist Sanele Sibiya said the increase was not looking good for emaSwati.
Sibiya said automatically with the bread hike, it meant E9 more to survive per month for households that would maintain bread consumption.


He said such was a major challenge that families needed to absorb. However, he said what was more concerning was the fuel increase because it was a basic commodity and not similar to bread, as it could be substituted with other breakfast choices or else consumers could buy the cheap bread which costs around E5.10 for a 400 gramme loaf.


Worrying


According to Sibiya, with the fuel increase, it was more worrying because it had parallel effects and would take away consumers’ purchasing power or satisfaction they were enjoying from their money.


He said currently, the country was tackling issues of cost-of-living adjustment (CoLA) but at the same time eroding citizens’ salaries by removing their purchasing power. This, he said, translated to adding fuel to an already burning fire. “People (civil servants) will direct their efforts towards demanding the CoLA because it means they are losing money and their salaries can no longer buy them whatever they used to purchase before.”


Sibiya said on the other hand, the effect on the bread hike was intended for those who were consuming it and other related commodities.
According to Sibiya, fuel was a basic commodity for every production process as companies required it to make and transport their products. 
“Basically, this means everyone will feel the 85 cents fuel increase as we are going to absorb it on the general upkeep by the mere fact on travel charges,” noted Sibiya.


Meanwhile, he said at the same time, wherever commodities were bought or imported from, the manufacturers would transfer the charges to the consumers as they would also feel the hike.


Further, Sibiya noted that for every commodity to be consumed by the consumers, they were most likely to see a hike in inflation. He said this would continue to erode consumers’ income even more than the bread price increase.


Hiking


The economist said this translated to salaries being affected and people having to experience less purchasing power. In general, he said for the cost-of-living, the fuel was not only increasing by the 85 cents but hiking at a larger scale.  


Meanwhile, Consumers’ Association Bongani ‘Bhanyaza’ Mdluli said as an organisation, they had always advocated for healthy competition. Mdluli said normally, what happened was that government gave minimum and maximum and their advice to consumers was that they should go for the cheaper bread.
He said so long as the bread met the standards, including weight and quality, consumers should opt for it and not the expensive one.  “The mere fact that there is a ceiling that is put, it does not mean bakers are compelled to put up their price where government has placed it,” Mdluli said.


He explained that bakers had a choice to place their price where they could be able to compete.
He urged consumers to be particular in terms of prices as increments on basic commodities would always be there. With the current economic situation faced by the country, Mdluli stated that they could only advise consumers to be careful with their spending.  “We are heading towards the festive season and do not expect reckless spending on the side of consumers,” Mdluli emphasised.

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