The price of potatoes in Namibia particular saw a significant surge of 40% y/y, compared to the 1.4% y/y recorded in October 2022, the latest inflation report by Simonis Storm reveals.
This rise can be attributed to Namibia’s heavy reliance on imports for its potatoes which has driven up the cost of these vegetables.
“Namibia imports approximately 4,000 tonnes of potatoes each month due to challenges faced by local potato production, especially during the hot summer months when cultivation is difficult. As a result, during October 2023, the borders were fully opened for potato imports, allowing traders to bring in 90% of potatoes, primarily from South Africa.
“Winter, being the preferred season for cultivation, further adds to the high demand and limited supply, following the conventional economic principle: the scarcer the commodity, the higher its price,” Simonis Storm said.
Namibia’s annual inflation rate stood at 6.0% y/y for October 2023, marking an increase from the 5.4% y/y rate recorded in September 2023. This marks the third consecutive increase since the 4.5% y/y deceleration observed in July 2023.
The monthly inflation rate for October 2023 remained stable, with the same rate as the 0.8% m/m rate reported in September 2023. While the category of food and non-alcoholic beverages continues to be the primary contributor to headline inflation, the transport category took the lead.
Food and non-alcoholic beverages category which accounts for 16.5% of the NCPI basket, saw an annual inflation rate of 9.4% y/y in October 2023, an increase from the 9.1% y/y recorded in October 2022 and but a slowdown from 9.8% y/y recorded last month. Food subcategory saw inflation rate of 9.2% y/y in October 2023, with fish prices increasing by 15.5% y/y, while milk, cheese and eggs rose by 12.4% y/y.
In October 2023, the FAO Food Price Index dropped slightly to 120.6 points (0.5% m/m drop). This was mainly due to lower prices for sugar, cereals, vegetable oils, and meat, with dairy product prices rising.
“Wheat prices fell due to increased supplies in the U.S., while coarse grain prices increased because of reduced maize supplies in Argentina. Rice prices declined due to weak global import demand, while vegetable oil prices decreased, particularly palm oil, and milk powder prices rose due to higher import demand and supply constraints in Europe. Pig meat prices continued to fall, and poultry rebounded due to avian influenza outbreaks and strong consumer demand. Sugar prices decreased because of increased production in Brazil, a weaker Brazilian currency, and lower ethanol prices, although concerns about supply constraints limited the drop,” Simonis Storm.