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Food prices increase as festive season nears

Food inflation has risen from 1.7 percent in November to 7.1 percent currently. Some of the foods whose prices have gone up already include bananas and vegetables.

What you need to know:

  • This situation started with Sugar whose price per kilogramme jumped to Shs5, 500 up from Shs3, 500 due to speculation by middle men and shortage in supply.
  • Ideally when the prices of sugar skyrocketed last week, speculators predicted that this would automatically be transferred to all the commodities including bread and cakes whose raw material is sugar but this has not been the case.

Kampala
In the hustle and bustle that is characteristic of the festive season, there is usually a rush to do last minute shopping. This commonly increases demand for the products amidst the reduction of supplies thus driving up prices.
Therefore, Ugandans have to brace themselves to put food on the table following a rise in food inflation from 1.7 percent in November to 7.1 percent currently.
While announcing the monetary policy statement for December 2016 on Wednesday, Emmanuel Tumusiime-Mutebile, the Governor of the Bank of Uganda (BoU), described the increase in food inflation as "huge".

Mutebile said the pickup in inflation was largely due to poor weather conditions that have affected crop production. Many parts of Uganda have or are still experiencing dry spells, with famine reported in many areas.
This situation started with Sugar whose price per kilogramme jumped to Shs5, 500 up from Shs3, 500 due to speculation by middle men and shortage in supply.
Some of the foods whose prices have gone up include maize flour, rice, beans, bananas, sweet potatoes, Irish potatoes, vegetables and cassava.

Ideally when the prices of sugar skyrocketed last week, speculators predicted that this would automatically be transferred to all the commodities including bread and cakes whose raw material is sugar but this has not been the case.
In an interview with Daily Monitor the chairman Uganda Bakers Association (UBA) –an umbrella organization of bakeries and wheat millers, Mr Guster Lule of Ntake Bakery said: “We are not going to increase the price of Bread because Sugar prices have gone up because of the festive season rush.”
Adding: “However if the prices of Sugar continue to be high even after the festivities and through January, we shall then sit as an association and see if we can review our prices.”

Chicken
Most chicken suppliers also say despite experiencing tough economic times, they are not increasing the prices of both live birds and processed chicken.
Mr James Kiwalabye, Ugachick ‘s Marketing Manager said: “We are not increasing the prices of our products. We want our customers to enjoy the festivities.”
He said that their Ugachick Supa (Assorted) still costs Shs14, 000 per Kilogramme as prices of other products remain unchanged.

Milk
Dairy Development Authority (DDA) Coordinator in South-Western Uganda, Mr Steven Aikiriza said the prices of milk have not increased yet.
“We don’t expect the prices of milk to increase because of the festive season. In any case it is Christmas every day. Instead we expect the prices to go down around that period because some processing plants will be closed,” Mr Aikiriza shared.
Currently, a litre of milk costs Shs500-700 at farm-gate price and Shs1, 350 at the retail end. And because of the rains, the price may even drop.

Consumer protection
Mr Shaban Sserunkuuma- Director of Programmes at Consumer Education Trust of Uganda (Consent)-an organization advocating for the rights of consumers in an interview with Daily Monitor said: “We have a predatory market where goods and service providers take advantage of vagaries in the marketplace.”
He said the country has 11 operational sugar factories and a production surplus of over 36,000 tonnes of sugar.
“You cannot tell me that the prevailing drought, bad weather, strikes by plantation workers or even interest rates on borrowed money in major sugar producing countries, would be major factors driving sugar prices to such insane levels! A slight increase would be understandable,” he argued.
Responding to the looming fear that prices of other commodities could increase, Mr Sserunkuuma said, this is a similar trend of the bandwagon effect spreading across certain goods and service chains, the high demand during Christmas notwithstanding.
His advice to consumers is to always buy in bulk for those who can afford it.

“For the rest, they should be prepared for the short term pain because it's normally transient and the prices will return to their normal levels,” he added.
He further said that the regulators should undertake advocacy measures targeting the trading community.
He said: “The message should be that short term profits earned through illogical price hikes could lead to distortions in the market that could hurt their bottom-line.”