Food Prices Update
In October, the food consumer price index (CPI) exhibited a mild decline at national level in contrast to seasonal expectations of a mild increase (based on the five-year average). Overall, however, food prices remain at elevated levels, again compared to the five-year average. The decrease was based on a moderate decline in the cereal CPI, which – although sharper than seasonal expectations – is roughly in line with seasonal trends. Regionally, Gambella recorded a strong decline in cereal prices, following on from an extremely sharp fall in prices between August and September. SNNPR also saw a strong decline, reversing the steady upward trend since January 2011. Tigray also observed a moderate decline in cereal prices, as did, to a lesser extent, Afar, Amhara, and Oromia Regions. Contrary to the general trend, there were mild and moderate cereal price increases in Somali Region and Beneshangul Gumuz respectively. Globally, FAO’s cereal price index dropped by 1.2 per cent (mild) from September to October as a result of slightly lower wheat and maize prices on international markets. Slowing demand from the livestock and industrial sectors contributed to a mild decrease in the price of maize, while rice prices remained fairly stable. All else equal, this implies that import parity prices will also exhibit mild declines for wheat and maize. Meat prices, meanwhile, remained stable compared to September and have, in fact, remained unchanged since October 2011, offering a stable market for meat exports. Looking ahead, the five-year average of seasonal trends suggests that cereal prices should continue falling moderately until January 2013. Given that meher rains were largely adequate for crop production, the seasonal trends offer a reasonable guide on the direction of prices in coming months. For more information, contact: infodrmfss@dppc.gov.et& FAO-Ethiopia@fao.org