Rising dollar decimates FMCG volumes

Volumes of fast moving

consumer goods and other

consumer products moving into

and through Mozambique are

unlikely to recover until the local

currencies strengthen against the

dollar.

As with South Africa and other

countries in the SADC region,

consumer spending power has

been severely curtailed by an array

of factors.

Local manufacturing of some

products has protected South

African consumers to some extent,

but Mozambique imports close to

100% of its consumer goods – and

these are priced in dollars.

Even where there is local

manufacturing or beneficiation,

the price has been affected by

the dollar cost of inputs of raw

materials and equipment.

Over the past year the

Mozambican metical has more

than halved in value against the

dollar.

While it was steady for a

number of years at around 30

meticais to the dollar, it has now

fallen to 76 meticais or more.

In September the metical was

also trading at 86 to the euro.

This has effectively halved

the buying power of consumers

shopping for goods priced in

dollars.

Even the rate against the South

African rand has fallen after

rallying a little earlier this year.