Namibia: Food Prices Rise Explosively

The price of food in Namibia is on the rise, increasing more than any other item in the average consumer's shopping basket.

According to the Namibia Statistics Agency (NSA), inflation on food and non-alcoholic beverages during the first quarter of 2021 was higher than on all other items.

For this quarter, prices increased by 5,8% compared to 2,6% in the corresponding quarter last year.

The NSA revealed this in its recently released 2021 bulletin on agriculture, forestry, and fishing in the first quarter.

Food is thus getting more expensive faster than other basic products, forcing households to make trade-offs in their budgets.

This is especially true for households with an income that remains stagnant despite rising prices.

Food currently accounts for 14,8% of Namibian consumers' baskets.

Inflation on food has increased by 6,1% in the first quarter of 2021, compared to an increase of 2,7% a year ago.

Bread and cereals account for the highest weight of food items that consumers purchase, at 4,8%, followed by meat at 3,5%.

According to the NSA, bread and cereals were 3,7% more expensive during the period under review, compared to the first quarter of 2020.

Within this category, rice recorded the highest price change rate with 15,2%, followed by biscuits and rusks (at 8,3%), and cakes at 7,2%.

Meat is 11,8% more expensive than a year ago, the NSA says.

This increase was observed for all types of meat, except canned meat, with a 4,8% increase as opposed to 20,2% recorded in the first quarter of 2020.

The upward trajectory spreads to sugar, jam, honey, syrups, chocolate, and confectioneries, which are 2,7% more expensive than a year ago.

The price of vegetables rose by 6,3% during the quarter under review.

The highest inflation change for vegetables was observed in sweet potatoes, which were 39,7% more expensive than a year ago.

This was followed by mealie cob prices at a 19,9% price increase, and pumpkin and squashes, with a 15,3% increase.

Milk, cheese, and eggs are 2,2% more expensive than a year ago.

The biggest increase in this category was observed in baby formula, which is 7,3% more expensive than a year ago, followed by fresh milk, long-life milk (with a 4,4% increase), and the price of preserved milk rising with 4,4%.

POSSIBLE CAUSES

The cost of food in the country can be explained by the value of various imported agricultural products - some finished and others raw.

The total value of agricultural commodity imports for the first three months of the year stood at N$706 million.

Agricultural imports for the first quarter of this year amounted to the second highest quarterly import in the past five years.

Notable is the country's cereal imports, on which Namibia has spent N$390 million in the first three months of this year.

The data shows that since 2017, the country has spent more than N$200 million on cereal imports in every quarter, except for the five quarters during which expenditure was between N$120 million and N$180 million.

Cereal imports (at N$449 million) were the highest in five years last year (first quarter) - almost equivalent to Namibia's total agricultural export value for the 2021 first quarter, which amounts to N$450 million.

Other agricultural products the country imports are spices, aromatic crops, raw milk, and vegetables.

Namibia is a net importer of dairy products, which has grown over the years, especially the importation of ultra-high temperature (UHT) and extended shelflife milk, the Namibia Agricultural Union (NAU) stated in their latest analysis of the livestock sector.

The union indicated that the domestic supply of raw milk has been declining since 2018 - negatively affecting the production of local UHT milk.

The union's data indicated that the sector anticipates a possible 20% decrease in raw milk for 2021, with producers leaving the sector.

"A mere 14,5 million litres of raw milk are expected to be produced in 2021," the NAU says.

This indicates more importation of raw milk, an investment opportunity, while the union suggested a policy intervention to develop an economy of scale.

Namibia's live animal quarterly exports, totalling N$450 million, accounted for more than half the country's total exports, valued at N$266,1 million.

The country also exported fruit and nuts worth N$166,7 million in the first quarter.

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