Zimbabwe faces food shortages over prices row

HARARE - Zimbabwe's government and the country's businesses have clashed over prices of basic commodities, now blamed for widespread shortages days after disputed polls won by President Robert Mugabe's ruling party.

Prices shot up by as much as 100 per cent after the March 31 parliamentary elections in which Mugabe's ZANU-PF government defeated the opposition Movement for Democratic Change (MDC), but the government swiftly moved in, ordering businesses to reverse the increases.

Most businesses have defied the order and essential food stuffs have disappeared from shops but some have re-emerged on the black market where prices are higher.

Mugabe, whom critics accuse of ruining Zimbabwe's once prosperous economy, has charged on several occasions that local businesses were working with the MDC to turn voters against ZANU-PF, in power since independence from Britain in 1980.

"Increases were actually delayed to avoid harsh criticism of the government ahead of the elections but now the government is saying you can not increase prices without consulting us .... that's not what we agreed," a spokesman for the Confederation of Zimbabwe Industries told Reuters.

The staple maize-meal, sugar and cooking oil have disappeared from most shops in Harare's city centre and suburbs while most pumps at fuel stations have run dry, forcing motorists to brace for long queues.

Maize-meal supplies were already erratic in the country in recent months with supermarkets out of stocks for days on end and long queues quickly form where the commodity is available.

Industry officials said the shortages were not artificial as charged by the government, but that production was falling as a result of uneconomic pricing and shortages of foreign exchange.

Central bank controlled foreign currency auctions are meeting less than 10 per cent of market needs.

"There have been serious foreign currency shortages and industry has found it increasingly difficult and has adjusted by lowering production," Zimbabwe National Chamber of Commerce president Luxon Zembe said.

"When that happens that leads to panic, and panic leads to hoarding. So you don't find commodities in shops but you find them on the streets," he said.

Analysts have predicted a worsening of economic woes as the country seeks to import 1.2 million tonnes of grain at an estimated cost of $250 ($355.77) million to feed a third of its people.

A poor harvest due to drought and inadequate seed and fertiliser support to small rural farmers who benefited from Mugabe's seizures of white-owned farms has worsened Zimbabwe's food crisis.

- REUTERS