BoT says high prices caused by diminishing food reserve

Cereal traders
The Bank of Tanzania (BoT) February Economic Review report has pointed at the shrinking national food reserve in the country as a factor that contributed to increased commodity prices.

According to the report, the reserves declined by 24 per cent in twelve months between January 2011 and January 2012 due to poor harvests and sales of cereals by the National Food Reserve Agency (NFRA) to meet food demands of some key institutions and local authorities.

The reserve is set to deplete further as 56 more districts are in dire demand for cereals.

In January 2011, a bag of maize weighing 100 kilos sold for 35,000/- but rose to 45,000/- by December 2011, an increase of 18.6 per cent.

The price of rice climbed by 36.4 per cent from 105,000/- per a 100 kilos bag in January 2011 to Sh165,000 by December 2011, pushing the retail price to 2,500/- per kilo from 1,500/-.

The NFRA opening stock in January 2011 was 220,035 tonnes of maize, which declined to 191,419 tonnes in May. It fell further to 139,404 tonnes in July before gaining to 179,488 tonnes in December.

However, the stockpile fell to 142,905 tonnes by February 2012.

According to the report, NFRA sold and distributed a total of 110,533.7 tonnes of maize from last July, out of which 3,531 tonnes were sold to prisons, 71,785.5 tonnes were handed to the Disaster Relief Coordination unit in the Prime Minister’s Office; while a total of 13,643.1 tonnes were sold to the World Food Programme (WFP).

Private traders bought a total of 21,574.1 tonnes to help stabilize market prices.Whole prices of major food crops, except potatoes, took an upward trend since July 2011 as some food was taken across the borders into Kenya, Sudan and Somalia that were facing acute food shortages.

The price of beans by December 2010 stood at 114,359/- which saw it at 131,000/- by December 2011, being a 14.6 per cent annual increase.
Source: The Citizen, , reported by Sturmius Mtweve and Veneranda Sumila

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