Price levels fall further
Aug 02, 2009
THE overall price level of goods and services dropped to 11.6% in July compared to 12.3% registered in June.
By David Mugabe
THE overall price level of goods and services dropped to 11.6% in July compared to 12.3% registered in June.
Although the price of foodstuffs went up as tough weather conditions tore the country, the core prices of other food and economic essentials like fuel, sugar, cement, matooke, Irish potatoes, beans and maize flour dipped further.
Releasing the annual headline inflation on Friday, Mathews Sewanyana, the director of macro-economics at the Uganda Bureau of Statistics (UBOS), said the impact of drought on food production and supply remained the main driver for July.
“The increase in food prices is mainly due to the reduced supply to the markets.
The monthly headline inflation rate for July rose further by 0.5% compared to a 0.3% increase in June,†said Sewanyana.
Adverse weather conditions that ravaged large sections of the country mostly affected agriculture, which is Uganda’s mainstay. Fruits and vegetables like mangoes, tangerine, pineapples, tomatoes, cabbage, chicken, fish and carrots, took the hardest knock from the drought.
On the contrary, the price of matooke, which ripen faster during the dry season, went down as market supply increased.
“Milk prices have gone up substantially due to low supply of grass and water on the other hand,†said Vincent Nsubuga, the UBOS principal statistician. But against this variation in prices, food inflation dropped to 19.4% in July from 21.6% in June.
The price of construction materials like cement and paint also dropped for the first time in several months.
“From March, the price of cement has been increasing but they just started coming down because of lower production and transport costs,†said Sewanyana. This is partly attributed to a decline in fuel prices.
The price and quantity of millet has also dipped with reports indicating that upland rice has become more lucrative and upcountry farmers are opting to plant more of rice.
A bumper harvest from the eastern region also helped cut down prices further.
THE overall price level of goods and services dropped to 11.6% in July compared to 12.3% registered in June.
Although the price of foodstuffs went up as tough weather conditions tore the country, the core prices of other food and economic essentials like fuel, sugar, cement, matooke, Irish potatoes, beans and maize flour dipped further.
Releasing the annual headline inflation on Friday, Mathews Sewanyana, the director of macro-economics at the Uganda Bureau of Statistics (UBOS), said the impact of drought on food production and supply remained the main driver for July.
“The increase in food prices is mainly due to the reduced supply to the markets.
The monthly headline inflation rate for July rose further by 0.5% compared to a 0.3% increase in June,†said Sewanyana.
Adverse weather conditions that ravaged large sections of the country mostly affected agriculture, which is Uganda’s mainstay. Fruits and vegetables like mangoes, tangerine, pineapples, tomatoes, cabbage, chicken, fish and carrots, took the hardest knock from the drought.
On the contrary, the price of matooke, which ripen faster during the dry season, went down as market supply increased.
“Milk prices have gone up substantially due to low supply of grass and water on the other hand,†said Vincent Nsubuga, the UBOS principal statistician. But against this variation in prices, food inflation dropped to 19.4% in July from 21.6% in June.
The price of construction materials like cement and paint also dropped for the first time in several months.
“From March, the price of cement has been increasing but they just started coming down because of lower production and transport costs,†said Sewanyana. This is partly attributed to a decline in fuel prices.
The price and quantity of millet has also dipped with reports indicating that upland rice has become more lucrative and upcountry farmers are opting to plant more of rice.
A bumper harvest from the eastern region also helped cut down prices further.