Vegetables the biggest driver of April inflation

The inflation figures released over the weekend could have been much lower than recorded had the economy not seen a huge jump in prices of vegetables, an analysis by Business Weekly shows.

For the first time in 21 months, the annual rate of inflation has dipped below 200 percent.

ZimStat released inflation figures for the month of April 2021 showing annual inflation at 194.1 percent and month-on-month inflation at 1.6 percent, down from 240.6 percent and 2.3 percent respectively.

However, an analysis by Business Weekly showed that the April inflation rate could have been much lower were it not for the significant increase in prices of vegetables.

Vegetables carry the fourth biggest weight of 7.81 percent in the inflation basket coming after bread and cereals that carry a weighting of 8.72 percent and transport that carry a weighting of 8.39. Meat inflation stood at 237.38 percent and with a weighting of 5.79 percent also minimised the extent of the inflation down turn. Transport inflation, with a weight of 8.39 percent was also of concern at 239.16 percent.

While inflation for bread and cereals at 190.53 percent was below the overall inflation out turn, prices of vegetables went up by a massive 263.7 percent annually.

Month on month the vegetable inflation for April was 2.5 percent.

While this was not the biggest jump, both annually and month-on-month, the weight the vegetables segment carries in the overall inflation basket makes it a key driver of inflation in the period under review.

A player in the sector has however said the price increases are not a result of increased demand over supply, or increased cost of production.

The incessant and prolonged rainfall season is to blame, according to Fresh In a Box founder and Vendor in Chief, Kudakwashe Musasiwa.

Fresh in a Box, is a vegetable sales and delivery startup.

Musasiwa said because the rain season extended longer than it has done before, vegetable farmers had to deal with diseases such as black rot and black diamond moth among others.

This was happening at “times where vegies were not supposed to be dealing with those particular issues”, according to Musasiwa.

The diseases meant farmers had to incur extra costs of imports to try and keep the vegies from fungicide.

“Even as far as April we had rains, and this really hurt the vegetable market, so the supply right now is retarded because a lot of farmers couldn’t keep their cabbages correct.

“Lot of farmers lost their potato plant”

Fresh in a Box, which also produces some of the vegies it sales and delivers also “lost a lot of crops because of the rains,” Musasiwa said.

“Its actually quite weird because normally rains are associated with great bumper harvest, but in the case of horticulture, if you are not in green houses and unable to protect your crops from direct rains, the market would be affected.

Musasiwa said currently it is extremely difficult to find things like broccoli, cauliflower, tomatoes and good quality cabbages.

“And because of that prices have gone way up and this is going to be ongoing for another three months or so and then prices will stabilise,” Musasiwa said.

He believes the winter crop will do better without the rains.

“Hopefully as we go further into August, September, October, some of the summer crops will benefit if rains delay.”

Apart from vegetables there were also significant year-on-year prices increases for alcoholic beverages with inflation rate at 227.88 percent.

The biggest price increases were however for medical aid contribution with inflation coming out at 948.46 percent. This category however does not carry much weight in the inflation basket.

Meanwhile, actual rentals for housing, which has a weighting of 19.83 percent in the overall basket, had a very low annual inflation rate of 9.91 percent and helped pull the overall inflation down.-ebuisnessweekly.co.zw