Rising food prices set to hurt buyers

Ugandan households are facing a fresh rise in food prices, with the latest figures from the Uganda Bureau of Statistics (Ubos) showing the soaring costs of staples such as cooking bananas, onions and fruits.

“The monthly headline inflation for August 2023 registered 0.6 percent from the 0.0 percent recorded in the month of July 2023,” Ubos said in an August 31 statement, adding: “This was mainly attributed to the monthly food and non-alcoholic beverages inflation that increased by 1.5 percent in August 2023 from the 1.2 percent drop recorded in July 2023.”

Official figures show that some of the sharpest jumps were registered in fruits, with mangoes inflation climbing from 1.0 percent in July to 26.1 percent in August. Elsewhere, pawpaws registered a spike from -3.6 percent in July to 18.8 percent in August. Oranges inflation was captured at 5.7 percent, up from -9.1 percent in July.

“Many people in offices and the real estate sector have increased their demand for this food, even matooke, which has outpaced supply. And in our on and off seasons, this time round there was scarcity on the market as many farmers had shifted to grow other food like maize,” Prof Augustus Nuwagaba, an economist, said of the recent surge in prices.

The August Consumer Price Index (CPI) also showed that there was a telling rise in fresh leaf vegetables. Traders in various Kampala markets told Saturday Monitor that a shortage of fresh leaf vegetables has persisted for three months in the country. It is unclear whether this is attributable to a new-found love by Ugandan households to pivot towards healthy diets.

Steep onions hike
According to Ubos, onions—one of the most used vegetables in Ugandan kitchens—have experienced the steepest of rises. Official statistics capture a price increase of 129.8 percent for the year ending in August 2023, as opposed to a one percent increase for the year ending in July 2023.

From salads to stews, the humble onion is a key ingredient in nearly every Ugandan dish. However, the vegetable now costs nearly three times more than its initial price a month ago.

Three red and white onions were selling for as much as Shs1,000 on Friday, compared to six per Shs1,000 before the price surges.

“Take a scenario of one group of people supplying [onions to] the whole country. They set their own price,” Mr Joel Mwesige, an onion seller at Nakasero market, told Monitor on Friday, adding that there was a shortage of onions this season because most farmers switched to growing maize.

The consequent shortage on the market left the nation’s suppliers in short supply. Traders we spoke to claim the suppliers, who are said to be from Mbale District, are manipulating the prices of mainly vegetables, driving it up to new heights.

“Most of the onions we have now on the market are from Tanzania. And in that country also the season was bad, they are now selling us the ones they had stocked earlier. So Uganda found itself being supplied by farmers from Tanzania and only those from Mbale,” Mr Mwesige revealed.

By mid-August, the price of a 170-kilogramme bag of onions had increased to more than Shs900,000. There are hopes that prices could soon go down, following a recent 32.8 point fall in the Food and Agriculture Organization’s index from its March 2022 peak.

Greedflation?
Prof Nuwagaba told Monitor that recent rising food prices in Uganda are in part down to what experts have christened “greedflation.”

“The prices of food have risen, but there is a mismatch with what farmers get. So the huge chunk is hoarded by middlemen, and this has continued to haunt the supply chain because farmers don’t know where the market is,” Prof Nuwagaba noted.

Ms Irene Kiiza Onyango, a spokesperson for the Trade ministry, said price fluctuations in food are to be expected as a result of weather changes. She also noted that the ministry is looking into the issue to find a solution as soon as possible.

Economists, nevertheless, remain optimistic that the recent food price hikes will fall in the short term because rain has returned to various parts of the country.

“In the long run, what is required is the control of food production because supply in the country is dependent on seasons of rain, and when that happens, there is either a lot of produce on the market or scarcity,” Dr Madina Guloba, a researcher at the Economic Policy Research Institute, told Monitor on Friday.

The government has so far invested more than Shs2 trillion in agriculture to reduce seasonal dependence on agriculture, which stifles market price control, but traders say this is insufficient.

“This should be scaled up to all regions with fertile soils so that we increase production while at the same time controlling it. It’s not proper to have food on the market that is from another country. That’s very delicate,” Mr Moses Mulindwa, a food seller in  Kireka, Wakiso, said.

Seasonal hunger
Economists warn that if a country is reliant on a few regions for the supply of highly demanded food on the market, scarcity is unavoidable.

“This raises food prices and increases consumption expenditure. Eventually, vulnerable households in a season like this forego meals and ultimately get malnourished. The government should expedite its investment in controlling seasonal production in agriculture,” Dr Guloba noted.

Already, dwindling cane in Busoga Sub-region have triggered an increase in retail prices for a kilogramme of sugar from an average of Shs5,302 in July to Shs5,678 in August per Ubos (a 6.3 percent increment). Natural honey, an alternative for slightly wealthy households mindful of non-communicable diseases, has also had its retail price shoot up by seven percent according to the latest CPI.

Uganda’s import bill increased by 3.5 percent to $898 million in June 2023 from $867.89 million in May 2023, according to data from the Treasury. 

This increase was primarily due to higher private sector imports of beverages, textiles, and petroleum products, as well as vegetables and other agricultural products. This was greater than the $650 million in export receipts from June, an increase of 11 percent from May.

“This increase was mainly on account of higher export earnings from beans, maize, cotton, and gold registered during the month,” the Finance ministry noted in the July 2023 performance of the economy report.

Selected increment
Cooking bananas: 7.1%
Onions: 55.12%
Mangoes: 33.3%
Fresh beans: 8.1%
Pawpaw: 15.3%
Sugar: 6.3%
Smoked tilapia: 7.5%
Traditional bred chicken: 5.5%
Natural honey: 7.0%
Tilapia fresh: 4.9%
Charcoal: 5.7%
Kerosene: 0.1%
Firewood: 0.4%

Food crops and related items inflation
July 2023: -3.1%
August 2023: 3.6%