Food costs bleed north

Shoppers charged 18% more than in Windhoek

28 February 2018 | Local News

The First Capital Food Price Index, which compared prices for the past two years, has revealed that northern shoppers are being charged a whopping 18% more for a basket of essential items than what is paid in Windhoek.

It was further found that a basket of food for which Namibians pay N$1 174.90 could cost a person 9% less in Botswana and 14% less in South Africa.

The figures for December 2017 reveal that Katima Mulilo is the most expensive town to buy groceries in, where a basket of food will cost you N$1 401. In Rundu, the same basket can cost up to N$1 399, while the cost in Ondwanga is N$1 339.

This is compared to Windhoek, where shoppers only have to fork out N$1 150 for the same items.

On average, a basket of food in Windhoek will cost about N$50 less in Swakopmund and N$67 less in Keetmanshoop.

When comparing 2017 prices with the year before, using an identical basket of food, 2017 prices in northern towns were on average 4.3% higher than 2016 prices, while in Windhoek, 2017 prices were only 2% higher than in 2016.

“This clearly indicates that the widening differences in the cost of an identical basket of food in Windhoek and the northern regions could be explained by the cost of transport from supplying centres in central regions to the northern parts of the country,” the report says.

The First Capital Food Price Index measures the price of a basket of food by compiling data from different branches of six supermarkets around six towns in Namibia, in order to compile the proxy for the cost of living using food prices for each of these towns. The most notable goods which became cheaper in Namibia during 2017, in comparison to 2016, were maize meal and local brands of rice. Maize meal prices were 4% cheaper in December 2017 than the previous year, while local brands of rice were 2% cheaper in December 2017, compared to 2016.

However, meat prices were 8.3% higher in December 2017 compared with 2016.

Mutton prices increased from N$67.17 to N$110.5, beef stew per kg increased from N$67.99 to N$74.32, while chicken 2kg braai cuts increased from N$79.95 to N$82.49.

Lucky Star Pilchards (400g) increased from N$20.55 to N$21.49.

Cooking oil (two litre) also increased from N$38.99 to N$40.18, while Sugar King White (2kg) increased from N$27.99 to N$30. 03.

A litre of Farm Fresh milk increased by 69 cents to N$19.69 and coffee (250g) from N$35.99 to N$37.74.

Fruit imports cause price hikes

Meanwhile, vegetable and fruit prices also showed increases which were mainly attributed to the fact that Namibia imports the majority of its horticulture products.

Despite potatoes being the highest demanded horticulture product in Namibia the country only produces a quarter of the total demand, while 75% of potatoes consumed are imported.

Although apples are the most consumed among the fruits, Namibia does not produce any apples. Very few bananas are also produced in Namibia, while nearly all bananas consumed are imported. Similarly, Namibia imports 93% of the total demand for oranges.

On average, December 2017 prices were 14% higher than prices in December 2015 and 5.5% higher than the average prices in 2016.

“Though prices are still rising, the rate at which they are rising has declined significantly throughout the year from the high of 13% in January 2017 (y/y) to 2.7% in December 2017 (y/y) indicating a downward trend in inflation,” the report says.

The price for meat and poultry products was on a continuous rise throughout last year.

In December 2017, the meat and poultry index was 8.3% higher than it was a year ago. On average, the index was 7.9% higher in 2017 than in 2016, implying that consumers had to pay more for meat than most of the other food commodities in 2017, relative to 2016. Despite the declining feed prices and improved grazing areas for livestock, meat prices remained relatively elevated, as farmers optimised on good pastures to restock and recover from the losses they endured during the drought conditions. It is expected that the cycle of rebuilding livestock herds will continue throughout 2018.