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    BusinessInflation hangs over Easter

    Inflation hangs over Easter

    Date:

    With the widespread political environment churned by political unrest and conflict, the state of market institutions in Ethiopia during the past two years has been difficult. Partly affected by the conflict, headline inflation has started spiraling out of control. This, however, is dissipating these days but the impact of the hangover looks to be lingering in Easter markets in Addis Ababa and the rest of the country. 

    Abay Moges, a cattle trader from Gondar, is hopefully waiting for Easter market to take up despite the unpleasant situation for the past two years.

    “Given the unrest in the region (Amhara region), we have faced problems to bring our cattle to Addis Ababa a,” he said. However, things seem relatively stable in the past two weeks; but not fully.

    He began to supply his cattle to Addis Ababa only three years ago; previously he was an exporter of cattle mainly to Sudan.

    Unlike previous holidays Abay and his friends no longer face unsafe and rough roads. But this time round, the challenge is different as they expect a significant price hike due to the current inflation.

    Abay sell his cattle at Kera Market Center. The 20,000sqm open cattle market in Kera was built almost half century ago. It is now one of the four major cattle markets in Addis Ababa including the ones in Kotebe and Akaki.

    The market center at Kera has the capacity to accommodate an average of 2,500 cattle and 3,000 sheep and goats at a time. But in the meantime, the center is receiving only cattle.

    It hosts all sorts of customers including those who own butcheries as well as individual customers.

    For this holiday, the market center at Kera has received cattle from most part of the country such as Gondar, Harar, Jimma and Jirru among others.

    As late as Thursday, the center had less than 500 cattle to be traded for the holiday; and Abay says the bulk of the cattle population is from Gondar while those coming from Harer, Jimma and Jirru were on their way.

    “In terms of supply, I do not really think that we will face a shortage,” Tekei Gidaye, coordinator of the Kera Livestock Market Centre, told The Reporter.

    Unlike previous holidays this time around there is no shortage, he affirms.

    Ethiopian Easter is a holiday which is really big on shopping; especially shopping for food stuffs as they break the annual two-month fasting seasons. The nature of the shopping depends on the financial capacity of the consumer.

    Unlike previous holidays, this one came in the aftermath of an easing political tension and relatively stable country. For the past one or two years,  people have witnessed market boycotts and strikes where those needing agricultural products were forced to wait for days or at times weeks since they were not entering markets in Addis Ababa. Those politically motivated market strikes especially from the most protest prone area of Oromia has created a significant shortage of foodstuff in the market.

    It was very difficult for farmers or traders to bring their items to markets in the capital, especially during market strikes. During those days, holiday markets were particularly affected.

    Tekie, however, predicts that there will be a significant price hike in the cattle market which could go as high as 1000 to 2000 Birr/ cattle. Meanwhile, other traders also claim the increment might go up to 3000 Birr/ cattle. This is mainly related with the recent price increment observed in food as well as non-food items.

    For instance, the transport cost to ship 15 cattle from Gondar to Addis Ababa last year was around 9,000 birr; now it stands at 15,000 birr. Moreover, the price of animal feed such as byproducts of wheat and beans, which are usually used to fatten the cattle, has increased by 40 to 50 percent/ kg.

    Recent reports indicate that the price of food items has been increasing persistently for the past few weeks and food inflation is in its historical high.

    A report released by Central Statistics Agency (CSA) has indicated that prices of goods and services is increasing at an alarming speed over the past couple of months leading to a 15.6 percent year-on-year headline inflation rate, one of the highest inflation rate in recent years.

    In this respect, food inflation was at 20.9 percent in February, 2018, while its non-food counterpart stands at 9.8 percent, compared with 8.4 percent in December, 2018.

    This inflation is largely related with the currency devaluation which took effect in October, 2017 where Ethiopia devalued its local currency (Birr) by 15 percent.

    During the devaluation some observers predicted that local products including local foodstuff would show a significant increase of 30 percent.

    In this respect, cattle from Gondar at Kera Market are sold from 13,000 birr to 30,000 birr. Usually, the prices vary depending on the size, type and origin of the cattle. Hence, cattle from the Harari region come out on top most of the time.

    During the Ethiopian New Year, the prices ranged between 7,000 Birr to 20,000 birr. Cattle from Gondar between 7,000 Birr and 11,000 birr, Hareri fetches a price ranging from 18,000 Birr to 20,000 Birr, while those from Jimma cost 9,000 to 12,000 Birr.

    Given the increase in the price of cattle from Gondar, the prices of cattle from the rest part of Ethiopia will also increase, said Tekeie.

    Ethiopia is estimated to have 51.3 million chicken population, according to Central Statics Agency. Out of this, 96 percent of them are indigenous whereas the rest are hybrid and exotic.

    The Reporter has also observed that there is an increase on the price of hens, sheep, egg as well as butter. In this regard at Shoal market hens are sold from 270 birr to 400 birr; sheep from 2,000 to 5,000 Birr, eggs up to 4 birr and butter goes up to 270 birr per kilogram.

    As far as the end of the fasting seasons are concerned, it is expected that there might be a continued increase in the price hike when it comes to the aforementioned food items. 

    “Over the past few months we used to have artificial shortages in the market,” said Endalkachew Tsegaye, communication director of Consumer Protection & Trade Competition, told The Reporter. When it comes to the supply side, however, talking about stable prices might be very tricky.

    According to an assessment conducted by his office as of this week, there is an increase in the agricultural products such as vegetables which the assessment shows could rise up to 10 percent. In this regard, a kilo of red onion is sold for up to 10 Birr; potato as high as 10 birr; tomato as well reach at 12 birr in the retail market.

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