Basic grocery items such as cooking oil, soap, fresh milk and sugar, among others, have disappeared from shelves in formal shops but are readily available on the informal market (tuckshops and streets).

Manufacturers are reportedly supplying goods to informal traders who pay in foreign currency as businesses shun the Zimbabwe dollar whose value has plummetted over the past few weeks.

The Confederation of Zimbabwe Retailers (CZR) president Denford Mutashu said re-dollarisation is posing a threat to the existence of formal trade. Business Times quoted Mutashu as saying:

Goods are vanishing from shelves into grey markets where they are priced in US dollars only and there is a general inability to replace stocks in the market.

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 manufacturers have come up with strict trade terms that most retailers cannot meet.

Confederation of Zimbabwe Industries (CZI) president Kurai Matsheza said basic goods shortages were not a supplier’s problem. Said Matsheza:

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

Some shops are failing to meet these trading terms which is why some are facing restocking challenges.

Recently Richards Group director Archie Dongo said suppliers are demanding forex payments for their products.

Dongo added that where the Zimbabwe dollar is accepted, retailers and wholesalers tend to be subjected to forward rating thereby making Zimbabwe-dollar invoiced products to be uncompetitive.