Key takeaways:
- Bread pricing remains politically sensitive across southern Africa, frequently prompting government intervention.
- Wheat subsidies, price caps and import controls are widely used to manage inflation and prevent unrest.
- Even in South Africa’s market-led system, political realities limit how far bread price increases can go.
Bread pricing has become increasingly sensitive across southern Africa, with governments in Zimbabwe, Mozambique, Eswatini (formerly Swaziland) and elsewhere in the region resorting to direct and indirect control measures. In South Africa – the region’s largest and most liberalized market – cost pressures are more often absorbed by producers or passed on to consumers.
South African bakeries export into neighboring markets such as Mozambique. Elsewhere in the region, however, the bread bakery industry is largely made up of local players.
Pricing by local producers is typically shaped by government interventions, including wheat subsidies and price curbs, researchers and analysts told this site in separate interviews. As a result, governments across the region frequently turn to subsidies and bread price controls to limit protests over food costs and inflation surges, often triggered by bread price hikes.
“The price of bread in Southern Africa is extremely politically sensitive, frequently acting as a spark for social unrest, riots, and challenges to political stability,” said Suresh Babu, a researcher with the Consultative Group on International Agricultural Research (CGIAR).
He added: “Governments in southern Africa now play direct and indirect roles in bread pricing, often seeking to balance affordability for the poor and the economic pressure that comes with providing cheaper subsidies for wheat imports and other inputs such as electricity.”
The risks are not theoretical. In November, a government-sanctioned 7% increase in the price of bread in Eswatini sparked social unrest. The move followed a request from the Eswatini Bakers Association to the Ministry of Industry, Commerce and Trade for a bread price hike.
In Malawi, citizens protested over price increases in 2025, including bread. The Competition and Fair Trading Commission of Malawi subsequently launched an investigation into bread companies for alleged collusion and excessive pricing.
Taken together, Babu said, these episodes explain why governments in southern Africa often feel compelled to subsidize bread prices in the interests of political stability. The region has seen the consequences of policy missteps before. In 2010, authorities in Mozambique were forced to reverse a decision to end subsidies after deadly protests erupted over the resulting bread price increases.
South Africa’s market model
Even in South Africa’s more liberal market, government intervention has not been absent. Last year, authorities moved to prevent a planned increase in bread prices by removing a costly regulatory fee on grain. Analysts say consumers in the country ‘are highly sensitive’ to bread pricing, with bread a key source of starch alongside maize meal.
“SA consumers switch regularly between maize meal and bread as their staple starch, with price the key variable influencing the purchase decision,” said Sean Culverwell, an investment analyst covering food and bakery companies at Anchor Capital. “Previous periods of grain inflation have squeezed bread producer margins because the entirety of the inflationary impact cannot be passed on.”
There has been some relief more recently. Following strong global wheat harvests, inflation for grains such as wheat ‘has come down’ materially. “This has lifted margins and volumes across the bakery and wheat value chain industry in South Africa,” Culverwell explained.
Thabile Nkunjana, senior agricultural economist with the National Agricultural Marketing Council (NAMC), said the South African government was not controlling or influencing wheat prices, with bread prices determined by market fundamentals. He conceded, however, that several factors continue to shape wheat – and bread – pricing.
“The increased cost of manufacturing affects both millers and farmers. In addition to decreasing wheat prices, which are making wheat production very challenging and unprofitable for local farmers, fertilizer and fuel expenses have skyrocketed since the conflict in Ukraine, despite a decline after recording high levels.”
As a result, South Africa’s current wheat tariff of $279 per tonne is “insufficient to protect local farmers,” increasing reliance on imports. Other countries in the region, including Zimbabwe, Malawi and Mozambique, remain heavily dependent on subsidies to lower the cost of imported wheat.
These measures include a mix of direct and indirect interventions, such as setting maximum prices or regulating the bread industry to contain cost pressures.
“Because much of the region depends on imported wheat, governments may influence prices by controlling foreign exchange for imports or subsidizing wheat flour,” said Babu. “In some cases, governments intervene to stop immediate price hikes, such as in Zimbabwe, where the government often attempts to manage bread prices, also through controlled importation of wheat.”
