September 15, 2011

Food prices continue to feed inflation

Namibia needs to find new ways of increasing its own food production to soften the blow of high international prices. Food was one of the major drivers of inflation in August, fuelling the Namibian Consumer Price Index to 5,4 per cent year-on-year, up from 4,8 per cent the previous month. Annual food inflation came in at 6,0 per cent, the second highest for the year and significantly up from 2,2 per cent last August.

The FAO Food Price Index averaged 231 points last month compared to 232 points in July. It was 26 per cent higher than in August 2010, but seven points below its all-time high of 238 points in February this year. Cereal prices rose, as even though production is expected to increase, it will not do so by enough to offset the additional demand, the FAO said. "Stocks continue to be low and prices continue to be high and volatile," the organisation said.┬┤The Cereal Price Index averaged 253 points in August, up 2,2 per cent, or five points, from July and 36 per cent higher than in August 2010.

The rise was largely offset by declines in international prices of most other commodities included in the index, oils and dairy products in particular, the FAO said. Cereal production is now this year forecast to reach 2,307 million tonnes, three per cent higher than in 2010. The FAO said maize supply was a cause for concern following downward revisions to crop prospects in the United States, the world's largest maize producer, because of hot weather in July and August. (The Namibian)


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