Zimbabwe, which has the world's highest inflation rate, faces a bread shortage after the government ordered bakers to lower their prices and wheat supplies declined.

The trade and industry ministry has ordered bakers to reduce the price of bread to 200 Zimbabwe dollars (80 cents) a loaf from 330 Zimbabwe dollars, Mike Oakley, managing director of TM Supermarkets, the country's largest supermarket chain, said in a telephone interview from Harare today. Obert Mpofu, the Trade and Industry Minister, didn't answer his telephone when Bloomberg News tried to contact him today.

“Bread needs to sell for about 330 Zimbabwe dollars for bakers to break-even,'' Oakley said.

There have been sporadic shortages of bread and corn meal, Zimbabwe's staple food, since 2000, when President Robert Mugabe began seizing mainly white-owned commercial farms for distribution to blacks deprived of land during colonial rule.

A shortage of wheat has also reduced the availability of bread, Bakers Association of Zimbabwe Chairman Burombo Mudumo said in a telephone interview.

“We can't afford to import our own wheat unless we raise prices,'' Mudumo said. “We're trying to stretch our small remaining stocks as far as possible.'' The association is negotiating with Zimbabwe's trade and industry ministry to increase the price to 330 Zimbabwe dollars a loaf, he added.

“Bakeries have told us to expect very small deliveries for the time being,'' John Gwekwerere, a manager at a TM Supermarkets store in Harare, said in a telephone interview. “Our own bakery had only enough flour today to make 100 loaves, but we sell about 2 000 loaves a day and more on weekends.”

Zimbabwe harvested about 218 000 metric tons of wheat this year, less than the 400 000 tons it consumes each year. The central bank said Sept. 14 it would import a further 120,000 tons of the grain after securing a loan from China.

John Chikomo, operations director at Lobels Bakery, the country's biggest bread maker, was arrested Sept. 16 for raising the price of bread without government permission, the Daily Mirror reported on its Web site today.

Zimbabwe's economy, previously the second-largest in southern Africa, has shrunk by more than a third since 2000 because of drought and Mugabe's land seizure program. Inflation rose to a record 1 205% in August and could reach over 4 000% next year, according to the International Monetary Fund.