Basic Commodities Begin To Vanish From Shop Shelves
17 June 2023
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Basic commodities have disappeared from shop shelves as most outlets are unable to secure foreign currency to replenish stocks, Business Times can report.

This comes as manufacturers are supplying goods to informal traders who pay in foreign currency as the economy battles currency volatility which has triggered a shortage of most locally manufactured basics.

A survey by this publication shows that products like cooking oil, soap, fresh milk and sugar, among others, were not on the shelves of most supermarkets in the capital.

However, the same products are available in tuckshops run by informal traders that sell in foreign currency. They are also available on the street supermarkets.

The Confederation of Zimbabwe Retailers president Denford Mutashu this week said the disappearance of basic goods had escalated.

“Goods are vanishing from shelves into grey markets where they are priced in US$ only and there is a general inability to replace stocks in the market,” Mutashu said.

He said formal trade has been affected by the exponential growth of the shadow economy yet remains entangled with regulatory, statutory fees, taxes, labour costs, and rentals.

“Supply chains have re-dollarised posing a threat to the existence of formal trade faced with the evaporation of market share easily surrendered to the informal trade while some suppliers and manufacturers are directing basic goods through ‘runners’ to the informal trade selling exclusively in US$ and not obligated to apply the legislated exchange rate when pricing goods,” Mutashu said.

He said the manufacturers are so cunning that they have come up with strict trade terms that most retailers cannot meet.

Most retailers usually pay within a week or fortnight, month or up to even six weeks but with that timeline, manufacturers are reluctant to supply formal outlets.

The Confederation of Zimbabwe Industries president Kurai Matsheza said basic goods shortages were not a supplier’s problem as they supply both formal and informal traders.

“We are supplying both informal traders and formal traders regardless of the currency but one is supplied upon meeting trading terms of the suppliers.

“Some shops are failing to meet these trading terms that is why, some are facing restocking challenges,” Matsheza said.

Some retailers are saying the Financial Intelligence Unit sometimes monitors them resulting in them incurring huge losses as the local currency continues to depreciate.

Matsheza said high costs of inputs due to surging inflation and diminished export competitiveness due to heavily taxing exporters through the parallel market premium on surrender requirements are affecting the industry.

Retailers and wholesalers said this week that there has been growing demand for foreign currency payments along the value chain that have left them in a difficult position to compete with the informal traders who solely trade in US$.

The ZWL$ has been declining in value over the past few months resulting in the continued rejection of the currency by businesses.

Businesses are now demanding forex as it is more stable and is more likely to ensure their survival in the long run.

Mutashu said businesses were struggling to survive under the current operating environment.

“It is quite critical now that we stay afloat because there is a fight for sustainability by the majority of businesses. It is a very difficult balancing act where you must price for affordability and still be able to price to remain alive in business. It is a catch 22 situation.”

Recently Richards Group director Archie Dongo said suppliers are demanding forex payments for their products with little prospects for settling the remaining US$ invoices in ZWL$ at any rate.

“Where the ZWL$ is accepted we tend as retailers and wholesalers to be subjected to forward rating and this forward rating on ZWL$ prices then condemns the ZWL$ invoiced product to be uncompetitive.