eBusiness Weekly
Tapiwanashe Mangwiro
Pressured by geopolitical events that have seen food prices soaring all over the world, Zimbabwe’s year-on-year inflation spiked to 131,7 percent in the month of May, its highest figure since June 2021.
The year-on-year inflation shot up from 96,4 percent recorded a month earlier, according to the Zimbabwe National Statistics Agency (ZimStat).
With prices of cooking oil and bread leaping higher as a result of the Russia — Ukraine war, the government last week tried to tamp down prices by suspending import duty on basic commodities like cooking oil, rice and flour.
The war in Ukraine has cut off a key supplier of wheat to Zimbabwe and also reduced supplies of farm chemicals for local crops.
Economist Professor Tony Hawkins said; “Global cooking oil prices have been rising since the Covid-19 began for multiple reasons, from poor harvests in South America to virus-related labour shortages and steadily increasing demand from the biofuel industry.”
According to Hawkins, the events have left net importers suffering from imported inflation as they cannot control supply chains.
“The war in Ukraine, which supplies nearly half of the world’s sunflower oil, on top of the 25 percent from Russia, has interrupted shipments and sent cooking oil prices spiraling,” he added.
It is the latest fallout to the global food supply from the Russia – Ukraine war, and another rising cost pinching households and businesses as inflation soars.
The conflict has further fueled already high food and energy costs, hitting the poorest people hardest.
Another Economist, Tinevimbo Shava said; “The food supply is particularly at risk as the war has disrupted crucial grain shipments from Ukraine and Russia and worsened a global fertiliser crunch that will mean costlier, less abundant food.
The loss of affordable supplies of wheat, barley and other grains raises the prospect of food shortages and political instability in African countries where millions rely on subsidised bread and cheap noodles.
Vegetable oil prices hit a record high in February, then increased another 23 percent in March, according to the U.N. Food and Agriculture Organisation.
Soybean oil, which sold for US$765 per tonne in 2019, was averaging US$1,957 per tonne in March, the World Bank said.
Palm oil prices were up 200 percent and they went even higher after Indonesia, one of the world’s top producers, banned cooking oil exports starting Thursday to protect domestic supply.
Regionally, countries have been feeling the pinch of the Russia – Ukraine war, with inflation coming in higher due to food price hikes.
CPI data published by Stats SA last week Wednesday (18 May) recorded the figure unchanged at 5.9 percent. However, this is still at the upper limit of the range set by the Reserve Bank, with the central bank itself expecting it to hit 6.2 percent in May.
South Africa’s President Cyril Ramaphosa has said that “bystander countries” were suffering due to sanctions against Russia and called for talks as the African Union (AU) prepared a mission to foster dialogue between Moscow and Kyiv.
“Even those countries that are either bystanders or not part of the conflict are also going to suffer from the sanctions that have been imposed against Russia,” he said during a news conference in Pretoria.
Africa, which has already seen millions pushed into extreme poverty by the COVID-19 pandemic, has been hit hard by rising food costs caused in part by disruptions linked to the war.
Russia and Ukraine account for nearly a third of global wheat and barley, and two-thirds of the world’s exports of sunflower oil used for cooking.
The conflict has damaged Ukraine’s ports and agricultural infrastructure, and that is likely to limit its agricultural production for years.
