Fuel prices rising the cost of agri products
Overall annual inflation averaged at 3.6% at the end of 2021 compared to 2.4% recorded at the end of 2020.
PHILLEPUS UUSIKU
Fuel, an essential input in the production and transportation of agricultural products, continues to increase, putting more pressure on both producers and consumers.
Following eight fuel price increases last year, consumers experienced another fuel increase earlier this month. The price of petrol increased by 30 cents per litre, while diesel increased by 40 cents per litre. Local analysts warned that consumers can expect more fuel price hikes in the coming months.
According to the Agricultural Bank of Namibia (Agribank), transport inflation remains on an upward trajectory as a result of increased global brent crude prices, while petrol and diesel price in Namibia surged by 36% in December 2021.
Continuous increases in petrol prices have a ripple effect on logistics, particularly farmers who regularly transports agriculture products such as animals to auctions and vice versa.
Further increases in petrol prices has a negative impact on the cost of production, resulting into final price inflation pressure on the end consumer. Although high prices might be beneficial to selling farmers, the net return on invest is affected by the high input cost, the bank said.
Due low supply of marketable animals during 2021, the price of meat increased significantly by 11.8%. High prices were observed at both producer and consumer level, Agribank said.
Similarly, challenges faced in the poultry industry translated into an increase in chicken prices on the shelves by 21.4%, exerting more pressure on the end consumer.
Fruits
Fruits were highly demanded during Covid-19 peak infections, particularly citrus. As a result, fruits inflation remained elevated, increasing by 14.9% in December 2021 on the back of increasing demand amidst low supply. Only 4% of fruits consumed is locally produced therefore, investment in fruit production remains crucial for product diversification, Namibia’s premier agricultural lender added.
The bank notes that the agriculture sector remains resilient amidst existing and Covid-19 related challenges, expanding by 5.9% in the third quarter of 2021 (3Q2021) compared to the contraction of 7.1% in the 3Q2020.
The growth can be attributed to improved land for crop cultivation that posted a double-digit growth of 11.6% and a recovery in livestock farming at 4.6% in 3Q2021. The overall sector is projected to contract by 1.3% in at the end of 2021, due to depressed marketing activities in the livestock subsector, Agribank said.
2022 is expected to improve, as livestock marketing improve on the back of better rangeland vegetation coupled with better rainfall benefiting the crop and agronomy industries.
Namibia’s economic performance is anticipated to improve slightly in 2022. Higher commodity prices coupled with the new diamond vessel will drive the mining sector, while the growth in manufacturing will be propelled by increase in the processing of meat and crop products coupled with increase beverage production, Agribank pointed out. [email protected]
Fuel, an essential input in the production and transportation of agricultural products, continues to increase, putting more pressure on both producers and consumers.
Following eight fuel price increases last year, consumers experienced another fuel increase earlier this month. The price of petrol increased by 30 cents per litre, while diesel increased by 40 cents per litre. Local analysts warned that consumers can expect more fuel price hikes in the coming months.
According to the Agricultural Bank of Namibia (Agribank), transport inflation remains on an upward trajectory as a result of increased global brent crude prices, while petrol and diesel price in Namibia surged by 36% in December 2021.
Continuous increases in petrol prices have a ripple effect on logistics, particularly farmers who regularly transports agriculture products such as animals to auctions and vice versa.
Further increases in petrol prices has a negative impact on the cost of production, resulting into final price inflation pressure on the end consumer. Although high prices might be beneficial to selling farmers, the net return on invest is affected by the high input cost, the bank said.
Due low supply of marketable animals during 2021, the price of meat increased significantly by 11.8%. High prices were observed at both producer and consumer level, Agribank said.
Similarly, challenges faced in the poultry industry translated into an increase in chicken prices on the shelves by 21.4%, exerting more pressure on the end consumer.
Fruits
Fruits were highly demanded during Covid-19 peak infections, particularly citrus. As a result, fruits inflation remained elevated, increasing by 14.9% in December 2021 on the back of increasing demand amidst low supply. Only 4% of fruits consumed is locally produced therefore, investment in fruit production remains crucial for product diversification, Namibia’s premier agricultural lender added.
The bank notes that the agriculture sector remains resilient amidst existing and Covid-19 related challenges, expanding by 5.9% in the third quarter of 2021 (3Q2021) compared to the contraction of 7.1% in the 3Q2020.
The growth can be attributed to improved land for crop cultivation that posted a double-digit growth of 11.6% and a recovery in livestock farming at 4.6% in 3Q2021. The overall sector is projected to contract by 1.3% in at the end of 2021, due to depressed marketing activities in the livestock subsector, Agribank said.
2022 is expected to improve, as livestock marketing improve on the back of better rangeland vegetation coupled with better rainfall benefiting the crop and agronomy industries.
Namibia’s economic performance is anticipated to improve slightly in 2022. Higher commodity prices coupled with the new diamond vessel will drive the mining sector, while the growth in manufacturing will be propelled by increase in the processing of meat and crop products coupled with increase beverage production, Agribank pointed out. [email protected]
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