CTI: Soaring food prices affect other businesses

Mwenge Food Market, Dar es Salaam
Unstable food prices are likely to affect the growth of other businesses and the entire economy unless investments in the agricultural sector improve.

Soaring food prices will seriously affect the well-being of low-income earners who spend more than 70 per cent of their income to purchase basic needs, mostly food.

The Confederation of Tanzania Industries (CTI) has expressed concern over the trickle down effect of rising food prices on the manufacturing sector because of the eroded consumer income.

"As the household income is eroded by high food prices, demand for other goods and services may automatically fall," noted Mr Hussein Kamote, the CTI Director of Policy and Advocacy in an interview on Thursday in Dar es Salaam.

Food prices provide important insights into how household budgets and provision for  the family's nutrition and health are being squeezed.

He said when a large portion of household earnings is spent on food, demand for non-food products like building materials, clothes, shoes, alcohol and soft drinks drop, thus impacting heavily on the returns of the manufacturing firms.

Mr Kamote
Mr Kamote said investments in the agricultural sector should focus on local needs to ensure that the whole country is supplied with enough food, as this would help stabilise prices.

He also said infrastructure development could be a significant strategy in stabilising prices as well as harnessing market potentials in neighbouring countries.

A survey conducted at Tandale, Kisutu and Tandika  markets in Dar es Salaam  established that prices have continued to edge upwards since January. 

The Vice-Chairperson of the Tandika Market, Mr Athuman Jongo, said the retail price for rice has risen to 2,500/- from 1,800/- per kilo. Beans have gone up to   2,000/- and 2,500/- per kilo from   1,200/- and 1,500/-.

Sugar has made a leap to 2,600/- from 2,100/- per kilo, while cooking oil is selling at 4,500/- instead of  2,500/- per litre.

Mr Jongo said Tandika market has been receiving large consignments of cereals, a good sign of plenty of food upcountry. Mr Samwel Nyamhongo, a trader at Kisutu market, said rising transport costs pushed food prices upwards.

"For food prices to go down, transport costs must drop first," he said.  Mr Hasan Kiwenga of  Tandale market said   food prices are expected to drop in the next two months when  harvesting begins.
Source: The Daily News,dailynews.co.tz, reported by Sebastian Mrindoko
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