Price monster zooms in on staples
Namibia’s annual overall inflation rate in May was 3.8%, the highest since the end of last year.
Jo-Maré Duddy – Bread and cereals, staple food for many Namibians, in May exited 12 months of deflation or decreasing price levels: its annual rate jumped from -1.5% in April to 2.3% last month.
Data released by the Namibia Statistics Agency (NSA) yesterday shows May’s annual inflation rate for bread and cereals is the highest since February last year, when it stood at 10.3%.
The big increase in bread and cereal inflation was the main driver of steeper overall food inflation of 4.1% in May, up from 2.9% in April and the highest since the 4.2% in August 2017. In May last year, the rate was 3.1%.
Higher food inflation is a bread and butter issue for Namibians as it is the second biggest item in the consumer basket. Food and non-alcoholic beverages carry a weight of 16.45 in the basket, second after housing, water and electricity with a weight of 28.36. That means that N$16.45 out of every N$100 in the consumer basket goes towards food and non-alcoholic beverages.
‘Strong impact’
Commenting on the latest inflation figures, Klaus Schade, research associate at the Economic Association of Namibia (EAN), said since bread and cereals accounts for the largest share (29.4%) of food items, “prices changes have a strong impact on the overall food price inflation”.
Annual inflation for meat, fruit and vegetables also increased.
Annual meat inflation in May was 8.5%, the highest since January 2018. Fruit recorded an annual rate of 12.6%, the steepest since February 2017’s 13%. Annual vegetable inflation came in at 5.8%, the highest since January 2017.
Schade says bread and cereals, meat, fruit and vegetables form more than 60% of total food prices and therefore “strongly determine the food price inflation”.
The latest figures also show relief. The annual inflation rate for milk, cheese and eggs in May was 0.2%. According to the data base on the NSA website, this is the lowest rate since June 2012, when a figure of 0.953% was recorded.
The rate for sugar, jam, honey, syrups, chocolate and confectionery in May was -1%. The last time the category was in deflation was in December 2010.
Outlook
“The increase in food prices is bad news for low-income earners and the poor since they spend the largest share of their total consumption on these items,” Schade says.
“We expect food prices to continue to increase. Future prices at the South African Future Exchange suggest price increases for white and yellow maize of some 7% by December 2018 and some 1% for wheat.
“Oil prices have also been on the increase, triggering fuel price increases that will have impacts on the transportation costs of goods and eventually on the production goods of businesses as well as the costs of consumer products,” he says.
Kassie:
Other inflation figures
Category May ’18 April ’18 May ‘17
Alcohol & tobacco 5.4% 4.7% 3.3%
Clothing & footwear -5.5% -5.8% 3.4%
Housing, water & electricity 3.3% 3.4% 9.8%
Furniture & household equipment 1% 1.1% 4.9%
Health 5.7% 5.6% 5.4%
Transport 5.6% 5.8% 7.1%
Education 9.9% 9.9% 7.8%
Hotels, cafes & restaurants 3.3% 2.4% 7.6%
Data released by the Namibia Statistics Agency (NSA) yesterday shows May’s annual inflation rate for bread and cereals is the highest since February last year, when it stood at 10.3%.
The big increase in bread and cereal inflation was the main driver of steeper overall food inflation of 4.1% in May, up from 2.9% in April and the highest since the 4.2% in August 2017. In May last year, the rate was 3.1%.
Higher food inflation is a bread and butter issue for Namibians as it is the second biggest item in the consumer basket. Food and non-alcoholic beverages carry a weight of 16.45 in the basket, second after housing, water and electricity with a weight of 28.36. That means that N$16.45 out of every N$100 in the consumer basket goes towards food and non-alcoholic beverages.
‘Strong impact’
Commenting on the latest inflation figures, Klaus Schade, research associate at the Economic Association of Namibia (EAN), said since bread and cereals accounts for the largest share (29.4%) of food items, “prices changes have a strong impact on the overall food price inflation”.
Annual inflation for meat, fruit and vegetables also increased.
Annual meat inflation in May was 8.5%, the highest since January 2018. Fruit recorded an annual rate of 12.6%, the steepest since February 2017’s 13%. Annual vegetable inflation came in at 5.8%, the highest since January 2017.
Schade says bread and cereals, meat, fruit and vegetables form more than 60% of total food prices and therefore “strongly determine the food price inflation”.
The latest figures also show relief. The annual inflation rate for milk, cheese and eggs in May was 0.2%. According to the data base on the NSA website, this is the lowest rate since June 2012, when a figure of 0.953% was recorded.
The rate for sugar, jam, honey, syrups, chocolate and confectionery in May was -1%. The last time the category was in deflation was in December 2010.
Outlook
“The increase in food prices is bad news for low-income earners and the poor since they spend the largest share of their total consumption on these items,” Schade says.
“We expect food prices to continue to increase. Future prices at the South African Future Exchange suggest price increases for white and yellow maize of some 7% by December 2018 and some 1% for wheat.
“Oil prices have also been on the increase, triggering fuel price increases that will have impacts on the transportation costs of goods and eventually on the production goods of businesses as well as the costs of consumer products,” he says.
Kassie:
Other inflation figures
Category May ’18 April ’18 May ‘17
Alcohol & tobacco 5.4% 4.7% 3.3%
Clothing & footwear -5.5% -5.8% 3.4%
Housing, water & electricity 3.3% 3.4% 9.8%
Furniture & household equipment 1% 1.1% 4.9%
Health 5.7% 5.6% 5.4%
Transport 5.6% 5.8% 7.1%
Education 9.9% 9.9% 7.8%
Hotels, cafes & restaurants 3.3% 2.4% 7.6%
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