Mozambique to stop bread price hike

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STEVE CHIOTAKIS: People in the southern African country of Mozambique are celebrating today, after their government reversed a price hike on bread. The increase was in response to how much more the country was having to pay for wheat and grain. It sparked food riots, with demonstrations and clashes with police. Thirteen people died in the violence. Reporter Gretchen Wilson is with us from Johannesburg. Hi Gretchen.


CHIOTAKIS: What’s happening right now in Mozambique?

WILSON: Well, Mozambique’s planning minister is saying the government will reverse the 30 percent price hike on bread. He also says the government will suspend salary increases for top officials. And you might wonder about this. Why is this such a big deal? Why were people burning tires and dodging rubber bullets just over bread? But you really have to understand the local context. Rolls of bread are a staple food for Mozambicans. And the government’s price increase jacked the price of one bread roll to 20 U.S. cents. This is in one of the poorest countries in the world. The average full-time worker makes just a little more than a dollar a day.

CHIOTAKIS: With the reversal things are quiet. Could things heat back up again?

WILSON: Certainly. The bigger issue is certainly not resolved. This is an ongoing clash about food security and the ability of poor nations to feed their citizens. Mozambique, for example, grows only about a third of the wheat it needs to make those bread rolls. So this story is not just about Mozambique, it really has its roots in another country more than 5,000 miles away.

CHIOTAKIS: Which country is that? And how is that affecting food prices in Mozambique?

WILSON: Well you really have to look to Russia. Global prices for wheat skyrocketed after Russia canceled all of its wheat in exports. Droughts and fires there hampered wheat productions. And that’s what prompted the price hike on Mozambique’s bread rolls. The government now says it’s going to subsidize the purchase of wheat to keep bread prices the same. It’s also going to maintain the price of other imported foods — things like rice and certain vegetables by cutting customs duties and taxes.

CHIOTAKIS: All right. Reporter Gretchen Wilson from Johannesburg. Gretchen, thanks.

WILSON: Thanks Steve.

All reporting by Gretchen L. Wilson, © 2010

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