ETHIOPIA MONTHLY MARKET WATCH November 2010

This situation attributed to the devaluation of local currency and the good ... In November 2010, the average wholesale nominal prices of maize in major urban ...
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ETHIOPIA MONTHLY MARKET WATCH

November 2010

Highlights •

The Government of Ethiopia has adjusted retail prices of fuel following the increases of crude oil prices on the international market in the first dekad of December 2010.



The country level general inflation calculated on 12 months moving average in November 2010 stood at 7.5%; food inflation at 0.8%; and non – food inflation at 18.6%. The food inflation rate that stood below zero for the last nine months moved up and reached at 0.8%.



The local prices of cereals in the month stood below the import parity prices; 60% for maize, 37% for wheat and 12% for sorghum. This situation attributed to the devaluation of local currency and the good Meher harvest of the main harvesting season.



In November 2010, the average wholesale nominal prices of maize in major urban markets continued to decline by about 3% while for wheat increased by the same percent and stable for sorghum as compared to October 2010.

Special Report – Adjustment to Fuel Prices The Government of Ethiopia has adjusted retail prices of fuel following the increases of crude oil prices on the international market in the beginning of December. The price of crude oil in the first dekad of December reached about US$ 89 per barrel. Accordingly, the retail prices of fuel was adjusted for the next one month and at Addis Ababa prices have increased by; 4.57% for benzene, 4.26% for kerosene and 4.33% for diesel. Compared to a year and six months ago the increases were higher respectively; 25.5% and 21.77% for benzene, 30.31% and 25.86% for diesel and 32.62% and 25.94% for kerosene.

A. Inflation and Consumer Price Index In November 2010, the country level general inflation calculated on 12 months moving average stood at 7.5%; Figure 1: Trends of Consumer Price Index food inflation at 0.8%; and non – food inflation at 18.6%. The food inflation rate that stood below zero for the last nine months moved up and reached at 0.8%. Compared to November 2009, the country level General Consumer Price Index (GCPI) has increased by 10.2%. This increase in the GCPI is attributed to the rise observed in the indices; 5.8% for food, 7.4% for beverages, 36.4% for cigarettes and tobacco, 23.3% for clothing and footwear, 12.9% for house rent, construction materials, water and fuel and power, 21.1% for furniture, Source: Central Statistics Agency furnishings, household equipment and operation, 15.2% for medical care and health, 16.4% for transport and communication, 31.8% for recreation, entertainment and education, 26.7% for personal care effects and 9.2% for miscellaneous goods. In the recent months, except for cereals, almost all the other food components have shown a rise in their indices. Specially, the index of pulses, oils and fats and milk, cheese and eggs has relatively showed a rising trend. The indices of vegetables and fruits (especially onions and garlic), spices and potatoes, tubers and stems For further questions or comments please contact [email protected] OR [email protected]

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ETHIOPIA MONTHLY MARKET WATCH

November 2010

have shown a relatively continuous rise in the past few months but showed a decreasing trend in November 2010(see Figure 1). If the decline in the indices of these items continue in the coming months, it will be advantageous to the net purchasers. B. Major Cereals Import Parity and Local Prices Compared to October 2010, the import parity and local prices of maize, wheat and sorghum at Addis Ababa remained stable in November 2010. However, the import parity prices of these commodities stood above November 2009 and May 2010 level whilst the local prices at Addis Ababa stood below the same comparison periods. The local prices of maize, wheat and sorghum stood below the import parity prices; 60% for maize, 37% for wheat and 12% for sorghum. These situations attributed to the devaluation of local currency