Relative Price Stability Greets Consumers

After witnessing unprecedented political, economic and social upheavals, Ethiopians will receive the New Year with relief. To celebrate the day, people from around the city go shopping in the open markets to buy food items. While the livestock market showed price drops, buyers take their time negotiating for good prices. The government says it is adequately intervening to stabilise the market, yet experts say there is more to the price dip, reports BEHAILU AYELE, FORTUNE STAFF WRITER.

Bizunesh Gebiso, 55, was at a livestock market near the new stadium that is under construction on Djibouti Street, looking to buy sheep for the holidays. On a hot Thursday afternoon last week, she stood facing Hailu Naser, a 40-year old sheep rancher.

“That price is too high,” she says referring to a ewe that Hailu was showing her.

They haggle for a price further before the rancher gives up and accepts the 1,400 Br that Bizunesh offered.

“Prices are better than last year, or even last Easter,” she tells Fortune.

But prices one not better for Hailu, who says that he could have sold the same sheep double that price just a year ago.

“I am only relenting, because I want you to become a future customer,” he told Bizunesh.

Moges Shallo, 57, agrees with Bizunesh. “You can see stability in the market,” Moges said. “Last time there was trouble all over the country, but there is better stability this time around, thus prices have declined.”

As is the custom in Ethiopia, Moges will have his three children and their kids visit for the holidays. Thus, he bought two sheep, which set him back 2,800 Br.

“Just a year ago, a sheep would have cost me 3,500 Br or more,” says Moges.

Players in the market have witnessed the decline in the price of livestocks.

“Livestock is selling for a much lower price this holiday,” says Tekaei Giday, coordinator at Qera Livestock Market Centre. “Supply has well-outperformed demand this time around.”

Andargachew Gashaw, the owner of Hermaed Trading Plc, which sells oxen and exports meat, believes that there is more at work here than just a surplus supply of livestock in the country.

“We have been facing a lot of problems,” he says. “Even when there was a good supply in the market, illegal trading severely curtailed it.”

The price of a bull in the market ranges from 9,000 Br to 15,000 Br, while steers are sold between 24,000 Br to 28,000 Br.

Addis Abeba’s supply of livestock comes in from different parts of Ethiopia, mainly Harar, Kibremegist, Wolega, Jimma, Bale and Wolayita. Ethiopia has one of the highest livestock populations in the world, standing at about 54 million.

The Qera livestock market sees the sale of up to 2,000 livestock a day during the holiday season. Despite this, cattle dealers say that demand is lower than they expected.

“I brought 10 bulls assuming that they would sell right away,” said Andargachew, who has to spend more on their and a place to keep the cattle for every day that they are not sold. “It didn’t go as I expected, I am still left with five.”

The winners and losers of the livestock market are reversed when it comes to poultry though.

“The roosters are very expensive,” Kidist Nigusu, 30, who was visiting the poultry market in Shola Gebeya, off Fikremariam Aba Tachan Street, tells Fortune.

A rooster was selling between 350 Br and 400 Br up from 300 Br to 350 Br. Kidist, nonetheless, bought two roosters.

“My parents will visit us for the holiday,” she says.

But since she lives in an apartment, where she does not have much space, she had to have the roosters butchered and cleaned at the market, which can cost up to 40 Br.

“The new way of life that revolves around work does not go with having to cook doro wot,” she said.

Doro wotis a traditional chicken stew that could take well over four hours to prepare.

“I can now start cooking just after getting home,” Kidist says. “Besides, apartments aren’t convenient places for slaughtering chickens.”

The prices of vegetables and milk products have also shown an increase. In Qera, tomatoes were sold for 20 Br a kilogram. Prices for traditional ghee butter was also inflated by 30 Br to 340 Br a kilogram as compared to the previous months.

Berbere, powdered and special red pepper, likewise increased by 50 Br, reaching 200 Br a kilogram.

The City Administration, anticipating such price fluctuations during the holiday season, has been implementing strategies to make prices more stable. A committee was formed 15 days ago to this end.

The initiative is taking place through the 143 cooperative consumer associations and over 20,000 retail shops situated around the capital.

“The cooperatives will sell poultry and beef meet for the holidays,” says Solomon Bekele, Addis Abeba Trade Bureau marketing director.

Solomon agrees with the assessment that supply has grown for this holiday season.

“With the political stability around farming areas, people have begun to bring more of their products to the market,” he said.

He says that consumers should consider buying food items from the cooperatives as they have fairer prices.

The City Administration also distributes over seven million litres of edible oil and 120,000ql of sugar every month, both of which are in high demand during the holiday.

The relatively stable prices of the New Year holiday are consistent with the easing of the inflationary pressure on food prices. Food inflation fell to 16.7pc from 17.9pc back in July, according to the Central Statistics Agency.

General inflation for August was 13.4pc, lower from than that of July, which was 14pc, according to the Agency.

The Agency has also reported that food items that get higher prices during the holidays such as meat, milk, cheese, eggs, butter and sugar, showed a slight decline in August.

Economists say that the government should receive some of the credit for the relative stability of the market.

“The government’s intervention was unavoidable given how prices could have gotten out of hand,” Alemayehu Geda (Prof.), professor of micro and international economic studies at Addis Abeba University.

There are other factors beyond adequate supply, he said.

“Most dealers were unable to sell as much as they expected in the past couple of holidays, so their stock has likely accumulated to create surpluses,” he said.

For Kidist and Bizunesh though, prices matter little during the Ethiopian New Year.

“I am just excited to celebrate the holiday with my family,” Kidist says with a smile on her face as she collects her butchered rooster.


Published on Sep 08,2018 [ Vol 19 ,No 958]



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