Staple food prices rise amidst high import reliance

Recently, the prices of staple foods in sub-Saharan Africa have increased by an average 23.9 per cent in 2020-2022. This marks the highest record since the 2008 global financial crisis.

According to the IMF fund, this is commensurate to an 8.5 per cent rise in the cost of a typical food consumption basket (beyond generalized price increases).

However, this has been blamed on global factors mainly the Russia-Ukraine war which has disrupted the world’s supply chain, as the two countries are key producers of some staple foods.

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African region, including Kenya imports most of its top staple foods—wheat, palm oil, and rice—the pass-through from global to local food prices is significant, nearly one-to-one in some countries.

Prices of locally sourced staples have also spiked in some countries on the back of domestic supply disruptions, local currency depreciations, and higher fertilizer and input costs.

Fertilizer prices expected to remain higher for longer

Kenya’s inflation on the other hand hit a five-year high in August, mainly driven by soaring food and fuel prices, Kenya National Bureau of Statistics (KNBS) data shows, with the August elections also playing a factor.

Rise of inflation

Inflation, a measure of the cost of living over the last 12 months rose by 20 basis points to 8.5 per cent up from 8.3 per cent in July.

It was the third month in a row that the country’s year-on-year inflation crossed the upper limit target of 7.5 percent.

Also read Kenya: Drought-Hit Kenyans to Receive Cash, Not Food Aid

According to outgoing the National Treasury CS Ukur Yatani, the country witnessed one of the most difficult seasons triggered by “Myriad global challenges, Covid-19 pandemic, rising fuel and food prices, as well as soaring global inflation.”

A two-kilo packet of maize flour, the country’s staple food hit a high of Sh220 despite the government subsidy.

IMF findings show in addition to global food prices, net import dependence, the share of staples in food consumption, and real effective exchange rates drive changes in local staple food prices.

Courtesy The Star

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