23 March 2011

Uganda: Food Prices May Double Due to Long Dry Spell

When food prices shot up world over during the Christmas season, Mr William Kyagera, a foodstuffs dealer at Kafumbe Mukasa Road in Kampala rejoiced. He thought it was a great opportunity he would exploit to earn a lot of money from his petty banana (matooke) vending business.

Indeed, he acquired a development loan from a microfinance institution to replenish his business. But four months down the road, Mr Kyagera has not realised his dreams and is regretting why he took a loan.

The soaring prices of all food commodities currently affecting everyone from farmers to consumers have caught up with him. He says it has become difficult for him to run the business because he loses customers daily due to the escalating prices.

Besides losing customers, he doesn't make savings since he has to dig deeper in his pockets to buy other foodstuffs and home needs. "I am at crossroads now. I really don't know whether I will be able to service the loan if the situation goes on," the distressed foodstuff dealer said.

"Late last year, we were selling an average bunch of matooke at Shs6,000 and a sack at Shs50,000, however today, the same quantity is sold at Shs15,000 and Shs75,000 respectively", he explains.

"Some of my customers have opted for alternative foods like cassava and potatoes that are relatively cheaper. We hardly make profits because sales are low," he says.

Moreover, prices of all food products have greatly increased with food like beans, maize, rice and groundnuts suffering the highest inflation. Prices of beans, maize and cowpeas have risen from Shs1,800, Shs400 and Shs2,200 to Shs2,400, Shs850 and Shs3,000 respectively.

The prices of other fresh foods, fruits and vegetables such as tomatoes, onions and Irish potatoes too have increased.

Godfrey Mugenyi, a vendor in St Balikudembe (Owino) market says cereal prices have tremendously escalated, making their business expensive to maintain. He says for one to compete favourably, he has to have a reasonable capital. "Those with small resources are likely to phase-out of business in the near future," he said.

Martin Mukiibi, a resident of Najjanankumbi, says he has been forced to cut back on other expenses for him to buy food items enough for the family. However, going by the weather outlook, it is predicated that the situation may worsen in the near future due to the current prolonged dry spell presently affecting more than 40 districts.

Information obtained from the Department of Meteorology indicates that the moderate La Niña conditions, which started developing in July 2010, are still prevailing and are likely to continue until mid-year 2011.

According to Ms Lukiya Tazalika, the acting Assistant Commissioner Forecasting, the rainfall forecast indicates that the first rainy season for period March to May 2011 is expected to be suppressed (near normal to below normal) for almost the whole northern part of Uganda. This include areas running from West Nile through Masindi, Gulu, Kitgum, Lira, Soroti, and Karamoja sub-region.

Tazalika says areas in the southern part of the country including those around Lake Victoria (starting from Busia to southern-western parts) are expected to experience near normal or above normal rainfall.

"In the western parts of the country, rains are expected to start between the second week of March and to spread to other areas during the third week of the month," Ms Tazalika, predicts.

Meanwhile, basing on the weather outlook, the Ministry of Agriculture, Animals Industry and Fisheries warns that in regions where rains are predicated to be below normal or above normal, crop failure is expected. In such areas, Maj Bright Rwamirama, State Minister of Animal Industry, advises farmers to practice timely planting of short duration or early maturing crops.

"Dry planting for cereals where possible is also encouraged as [we] wait for the rains to begin. Plant crops that are tolerant to drought conditions," he suggested. The Minister also warns that the current drought conditions may trigger outbreaks of diseases and pests, in some cases to epidemic levels.

Rwamirama says everyone in the community should be vigilant about pests and diseases and quickly report any case to the nearest extension worker or local leaders.

Meanwhile, rising food prices are a persistent phenomenon worldwide. Besides drought, scientists blame increasing prices to many other factors like high oil prices and low grain stocks.

Global food prices increased for the eighth consecutive month in February, with prices of all commodity groups monitored rising again, except for sugar, according to the FAO Food Price Index. A tightening of the global cereal supply and demand balance in 2010/11 is likely.

In response to the current rising prices, FAO announced last week that it will partner with stakeholders and run a series of seminars in Africa, Asia and the Pacific, Central Asia, Europe, Latin America, and the Near East to help governments to make informed decisions on how to respond to high food prices. "FAO feels it is essential that countries consider their policy options and steer away from decisions that might exacerbate the situation," said FAO Deputy Director-General He Changchui.

"During the last food crisis, the situation was aggravated when some countries imposed export restrictions or engaged in panic buying," he said, "Governments should focus on mitigating the impact of high food prices on the poor and at the same time need to take steps that favour investment in agriculture."And critical impacts will befall those living in extreme poverty since they will be spending up to 90 per cent of their income on food.

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