Closed borders push up vegetable prices

Higher and higher: Vegetables are leading price increases in the inflation calculation
Higher and higher: Vegetables are leading price increases in the inflation calculation

While inflation has been cooling in recent months, reaching a 35-month low of 1.5 percent in July, the average price of vegetables has remained stubbornly high, measuring annual average of 15.8% last month.

Data from Statistics Botswana’s Consumer Price Index (CPI) released last week, show that vegetables top the list of goods and services with the highest percentage change on a 12-month basis running from July last year to the same month this year. The price of vegetables has been on a sharp increase over the course of the year due to market supply side inconsistencies.

This follows government’s decision in January 2022 to impose a restrictive ban on the importation of 16 vegetable types. The ban targets 16 vegetables such as onions, butternut, tomatoes, watermelons, carrots, potatoes, cabbage, and ginger but three crops, in particular, potatoes, tomatoes and onions accounted for 53% of the horticultural import bill. Responding to a question in Parliament, the Minister of Trade and Industry, Mmusi Kgafela said though Botswana had not reached full production capacity, mild signs of improvement were starting to show as the import bill had been slashed and the country's production capacity was improving.

“The imposition of the restriction on importation of fruits and vegetables clearly has had an impact on the structure of our imports,” he said previously. The gulf between national demand and what local farmers are currently able to produce is what creates room for unsteady price movement of vegetables in the country. Over the last 12 months, some analysts have accused retailers of buying from farmers at low prices and adding huge mark ups, a dishonest business practice known as “profiteering”.

The vegetable inflation rate is part and parcel of a generally high food inflation which stood at 10.7% as of July 2023, down from 12.9% in June. Consumers have been complaining that though inflation is said to have been cooling for the whole of this year, they are not experiencing the price decrease at the shop shelves. Data from Statistics Botswana suggests that though the pace of price increases for different commodities such as transport and fuel have been slowing, food inflation remains stubborn. Analysts believe the food inflation crisis will persist into upcoming quarters due to the ongoing global tensions fuelled by the Russia-Ukraine war and international raw material price spikes.

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