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Zambia mulls maize price controls

Dec 28 2012 14:52 Reuters
Wheat farm

(File, Orlin Wagner, AP)

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Lusaka - Zambia is considering re-introducing price controls on its staple maize meal to protect consumers from food inflation, state radio quoted President Michael Sata as saying on Friday.

The price of maize meal has almost doubled to 80 000 kwacha ($15.41) per 25 kg bag from 45 000 kwacha ($8.67) two months ago and the government says the sharp increase is unjustifiable.

Sata said the government would bring back price controls it abolished in 1991 if millers maintained high prices, the state-owned Zambia National Broadcasting Corporation reported.

"As government we can re-introduce price controls if they (millers) don't stop exploiting people," Sata said, according to the station.

The southern African country subsidises maize production and buys the produce, which it then cheaply supplies to millers in times of shortage to keep maize meal prices affordable.

Agriculture minister Emmanuel Chenda this week said the high maize meal price was unjustified after the government offloaded 112 000 tonnes of maize on the local market.

Chenda said some millers who received subsidised maize from the government were selling maize meal to neighbouring Democratic Republic of Congo (DRC) instead of supplying the local market.

Maize meal is the staple of the Zambian diet that sustains poor households, so curbs on its price could be have wide political support.

Zambia's inflation rate accelerated to 7.3% year-on-year in December from 6.9% in November, partly because of rising food prices.

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