Global food inflation hits consumers
23 September 2021 | Agriculture
In the first six months of this year, global food prices increased by 26.3%, compared to the same period last year.
According to the Namibia Agricultural Union (NAU), this is because of a significant increase in oil and cereal prices.
The union says that comparing 2020’s January to June oil prices with those of 2021, they grew on average by 73.6% due to an increase in palm, soy and rapeseed oils.
Cereal prices increased by more than 28.9%, because of a significant increase in the prices of maize and wheat.
The NAU further adds that meat prices increased steadily by an average of 6.7% because of tight global supply across all meat types and a strong import demand from East Asian countries, mainly China.
“After 12 months of consecutive increases, the first global food price declines of about 2.2% and 1.2% month-on-month were experienced in June and July this year respectively.”
According to the union the decrease occurred due to restriction in the price of cereals and oils.
The NAU says Argentina had a better-than-expected crop yield, whereas US production improved, leading to drops in international maize prizes.
“Other grains such as barley and sorghum experienced a weaker demand, causing prices to lower as well. Additionally, Argentina’s lower biodiesel blending mandate was seen to be putting pressure on soy oil prices, while prospective record supplies of rape and sunflower oils for the 2021/2022 season influenced oil prices.”
The NAU pointed out that it takes time for global market trends to filter through to the domestic market and, as such, June’s global food inflation drop did not immediately filter through to Namibia’s food inflation.
Namibia’s food inflation increased from 7.1% in May to 7.7% in June 2021, but it dropped to 6.5% in July.
“Interestingly, meat prices slowed down slightly, from a 16.7% increase in May to a 16% and 14.9% in June and July, respectively. Nevertheless, meat remained a contributor to a high food inflation in Namibia.”