Fish and Meat remain expensive despite slowing Food inflation basket
Food inflation continued to increase at a slower pace of 3.5% year on year in October compared to 11.9% recorded in the prior year, Indileni Nanghonga, Junior Analyst at Simonis Storms Securities said.
According to statistics released by the Namibia Statistics Agency, the lower inflation rate is pronounced in Bread and Cereals, Oils and Fats, and Fruits, while meat and fish inflation remained elevated at 9.2% and 15.2% in October 2017 compared to 5.3% and 26.2% respectively, in the prior year.
“We reckon that another rate cut by 25bps is eminent considering that inflation continues to moderate below historic average of 5.9%,” Nanghonga said.
The prices of sheep increased by 11.5% on average in 2017 from N$35.7/kg in 2016 to N$42.8/kg in October 2017. This increase in sheep prices can be attributed to less supply in the market as the number of sheep slaughtered at the abattoirs decreased.
Meanwhile, beef producer prices skyrocketed by 17.0% on average in 2017 to N$35.8/kg average in September 2017 compared to N$29.5/kg annual average for 2016.
“This is partly attributed to poor rainfall since 2016, instigating a prolonged food deficit which led to weight loss and increased deaths of livestock. Our view is that meat prices will remain elevated for the remainder of 2017,” Nanghonga said.