TRADERS say food prices, especially of rice are expected to fall further following bumper harvest in southern highland regions including Mbeya last year.
Economists have predicted deeper drop of the country's inflation rate on the back of favourable prices of rice and other food crops. Rice is a staple food in many parts of the country, particularly coastal areas.
The National Bureau of Statistics (TBS) said last week that annual headline inflation declined to 5.6 per cent in December, last year, from 6.2 per cent a month earlier due to slower rise in prices of commodities during the month.
According to TBS, the food and non-alcoholic beverages inflation rate decreased to 5.6 per cent in December. Overall, the trend indicates that the speed of price increase for goods and services decreased significantly in 2013, when compared with the speed of price increase in 2012, the statistics body said.
The annual average headline inflation rates have decreased to 7.9 per cent in 2013 from 16.0 per cent in 2013.This trend is highly attributed to the decrease in prices for food items. 'Business Standard' survey showed rice price range of between 1,800/- and 1,100/- per kilogramme at major food markets in Mwananyamala, Sinza and Mwenge.
For wholesale price at Buguruni and Tandale, it ranged from 1,500/- to 1,100/-. The highest price is for rice from Mbeya which is the most preferred and the lowest is for the one sourced from Ifakara in Morogoro Region.
Rice traders told the 'Business Standard' that the prices have stabilised since early last year when they reached an all time high due to poor harvests in rice growing areas in 2011.
They said they expected rice price will not rise as they were assured of its abundant supply, because large stocks of rice harvested in 2013 were still in godowns in Mbeya. They said the stocks of the food from last year's harvests would not be finished before the new harvest season begins next April and May.
According to them, food stores and godowns in Mbeya were full of rice and traders were in a rush to clear the stock before the new season.
"Rice is plentiful. People in Ifakara have not sold theirs and so is the case in Shinyanga. We are selling rice from Mbeya and it is still abundant," said Kassim Mohamed, a trader at Mwananyamala market.
"We do not expect the price of rice to rise. The godowns in Mbeya are full of last year's harvests." Mr Mohamed, who buys rice direct from farmers in Mbeya, said the rice yields last year in Mbeya were so high that it could not be finished unless farmers were allowed to sell outside the country.
"We in Tanzania cannot eat it all...we cannot finish it. Not at all. The godowns in Mbeya are full of rice," he stressed. Another rice trader at Mwananyamala, Jabir Richard was also of the same opinion that prices of the product was not expected to rise due to bumper yields in 2013 in the rice growing areas.
"The price cannot rise. There is plentiful of it (rice) in godowns in Mbeya and Ifakara. The godowns are full of rice," he said. Mr Richard said current rice price in Mbeya and Ifakara were lower than the ones paid by traders when they bought the product last year and stocked them.
Mr Mussa Rashid, a rice trader at Buguruni food market also shared the same view that rice prices will not rise because of its plentiful supply. "We are assured of its abundant supply (therefore) the price cannot rise, unless something strange comes up...the prices will not change.
They usually change in September but due to high yields it did not change," "Traders are in a rush to clear their stock...they must clear the stock before the harvest season begins otherwise they suffer big loss," he said.
Mr Adam Mwasi, another rice trader at Buguruni market said there is plenty of rice in Mbeya Region and as a result its price in Dar es Salaam will not change. He said the prices were so low that he doubted whether farmers would benefit because of high costs of farming inputs.
Inflation in Tanzania has maintained a downward trend since it reached an all time high of 19.80 per cent in December 2011.
It dropped to a single digit from February, last year and with exception of October when it slightly increased, it kept on declining throughout the year. The decline has surpassed government target of 6.0 per cent by June 2014.