The Reporter (Addis Ababa)
Kaleyesus Bekele
9 September 2007
The increasing inflation rate noted in the past two years has been of great national concern. The inflationary pressures were felt by almost everyone. The ruling and the opposition parties have been debating the issue.
The overall inflation rate reached 20 percent. The price hike on food items affected the urban population seriously. The price increase on some food items was over 100 percent. The price of a quintal (100 kg) of sesame, which was 500 birr last year, increased to 1000 birr. The price of a quintal of teff reached 500-590 birr based on the type of the teff. The price of wheat increased from 230 to 300 birr per quintal. The price of corn increased by 100 percent to 250 birr.
According to a market assessment made by The Reporter this week, the prices of some cereals declined by some amount. The price of netch teff (white teff) which was 590 birr two months ago declined to 550 birr. The price of a quintal of first grade corn decreased from 250 to 230. The price of first grade wheat declined from 320 to 310 birr per quintal.
The price of a quintal of horse beans fell from 420 to 360 birr.
Girma Belachew, a grain trader in the Mesalemiya area, the major grain market in Addis Ababa, said that the reason for the price decline on some of the grains could be the end of the rainy season. "Usually the price of cereals reaches a peak during the rainy season. Since it is the end of the rainy season and the harvesting time is approaching, traders sell their stocks," Girma said. "New harvest will enter into the market soon traders prefer to sell what they have in stock," he added.
Kelifa Seid, another trader, believes that some of the prices of cereals were inflated. "Traders who hoard cereals create an artificial shortage. When these traders release their stocks prices would fall," Kelifa said.
Though the prices of some cereals were going down, there are others whose price has increased. For instance, the price of a quintal of sergegna teff increased from 430 birr to 470. Lifewise, the price of key (red) teff increased from 410 to 450 birr. The traders said they do not know the reason for the price increase on these particular types of teff.
Some of the traders attribute the price hike on food items to the increasing demand. "The population has been increasing steadily. So does the demand for food. When there is more demand, naturally prices would go up," says Elfinesh Habtamu, a grain trader in Mesalemiya. Elfinesh said the export of pulses and oilseeds was going up and this has an impact on the local market.
Government officials argue that improved access to market, information and loans were the contributing factors to the price hikes. "Infrastructure development has its own impact on the market," the Minister of Finance and Economic development Sufian Ahmed said.
Sufian said the construction of roads enables farmers to have better access to the market. "Because of the telecom infrastructure development projects, farmers are better informed. And better access to loans provided by micro-finance institutions enable farmers to sell agricultural products for better prices," Sufian said.
The price hike on oilseeds is the most outrageous. The price of oilseeds such as seasame increased by 100 percent. Edible oil manufactures are facing a serious problem.
Mengesah Kebede, manager of Addis Modjo Edible Oil Factory, said that because of the increasing price of raw materials the factory was unable to produce at its full capacity. Mengesha said the price of raw materials used to produce edible oil increased by 155 percent. The price of a liter of cooking oil reached 20 birr. Edible oil manufacturers attribute the price hike on oilseeds to growing export. Oilseeds export accounts for 21.1 percent of the country's total export earnings.
Be the first to Write a Comment!
Copyright © 2007 The Reporter. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
