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Oil, fats prices reduced

Home National Oil, fats prices reduced
Oil, fats prices reduced

The recent decrease in the prices for household oils and fats by 2.2% in December 2023, compared to the steep increase of 20.8% a year ago, has come as a relief to many people, especially informal food traders.

Over the past year, the cost of food has drastically risen, particularly that of cooking oil, which has put a strain on street vendors such as those who make a living through selling the beloved street dish vetkoek.

These decreases, which have eased some pressure on domestic households, were reflected in the price of cooking fats which dropped from 14.2% to -3.0%, cooking oil (from 28.1% to -7.5%) and margarine and margarine spreads (from 9.8% to 3.6%).

These inflation statistics were released last week by the Namibia Statistics Agency (NSA) for December 2023.

Informal trader Marry Hangero said the decrease will be a relief for her business now that schools are opening. 

“This is time to make money with school children returning. If cooking oil prices decrease more there is no doubt that we will be smiling,” she stated.

Before the decrease, vendor Alvina Joseph told New Era that business had been tough as she was forced to raise prices and her customers were declining. 

The 40-year-old specifically lamented the escalating cooking oil prices, which made it extremely difficult to make a profit from selling fat cakes.

“Yoh! The moment I see the price, I just want to run away and leave everything. How can the price jump up like that? We rarely make a profit now. If I increase the price, no one buys, and I end up making a loss. I just have to go with the flow,” said Joseph, who has been trading at Soweto Market for 12 years. 

Vetkoek, a sweet dough fried in hot oil, can be enjoyed any time of the day with meat, relish, or on its own. It is easy to make, and it is enjoyed by people from all walks of life.  It is estimated the informal economy contributes about 24% to the country’s gross domestic product and constitutes around 56% of the labour force.

Industrialisation and trade minister Lucia Ipumbu last year described the informal economy as a key lever for ensuring sustainable livelihoods, as well as innovative and dynamic entrepreneurship, particularly for vulnerable or less educated citizens, such as women and youth, who may have inclusivity limitations in the formal economy.

Meanwhile, local economist David Jarrett said: “As long as these price decreases are passed on to the target group, then this should provide a marginal breathing space. However, the reality might be very different and so a deeper increase will be needed for impact as the current space only translates into 2 cents on the dollar”.

Inflation

Furthermore, the statistics agency revealed that the annual percentage price changes on goods stood at 6.8% in December 2023 compared to 9.6% a year ago, while the annual inflation rate for services stood at 3.12% in December 2023, unchanged when compared to 3.1% registered in December 2022. 

Month-on-month, the inflation rates for goods witnessed a deflation of 0.2%, compared to 0.4% registered during November 2023, while the inflation rate for services was estimated at 0.0% in December 2023, unchanged compared to a month earlier.

Deflation can be explained as a decrease in the general prices  of goods and services. Deflation occurs when the inflation rate falls below 0% (a negative inflation rate). Inflation reduces the value of currency over time, but deflation increases it. 

– mndjavera@nepc.com.na