Coronavirus pandemic: Prices of food commodities going up

Jonathan Dery, Project Officer, SEND GHANA

The COVID-19 pandemic undoubtedly is creating disruptions in the socio-economic activities of Ghana and threatening the collective survival of the citizenry in diverse ways. One such disruption relates to the hikes in prices of foodstuff, which is key in determining what food people can afford to consume. 

Earlier in March, the Ghana Union of Traders Association (GUTA) warns of a possible shortage of goods, price hikes over the Coronavirus, and further cautioned of a worsening situation if the disease is not contained.[1] In opposition, the Minister of Food and Agriculture, during the Meet the Press session on Thursday, April, 23 said that “food prices are cheaper now despite the outbreak of COVID-19.”[2]

The evidence on the ground, however, does not support the Minister’s claims.

An assessment of some prices of food commodities in major market in Ghana, including Accra, Bawku, Kumasi, Techiman, Tamale, Takoradi, and Dambai is showing a sloping upwards since the outbreak of COVID-19. Esoko, which is a market price watcher in its monthly publications revealed that an average wholesale prices of maize, rice, and yam as presented in the figure below saw a significant month-on-month and year-on-year changes between March and April 2019, compared to the same period in 2020, when the lockdown and other restrictions were imposed in Ghana due to the COVID-19 pandemic.

While the average price of 100kg bag of maize in April 2019 (Gh 153.62) increased by 3.90 percent over that of March 2019 (Gh 147.86), it rose significantly by 18.10 percent within the same period (April-March) in 2020. That of 100kg of local rice inched up by 0.43percent within the same period in 2019 and 4.98 percent in 2020.  The average price of 100 tubers of yam which increased by 14.80 percent between March (Gh 605.33) and April (Gh 694.93) 2019, rose sharply by 22.11 percent within the same period in 2020. On a year-on-year basis, the average price of the same unit (supra) of rice and yam increased by 1.18 percent and 10.22 percent respectively between March 2019 and 2020; and respectively by 5.77 percent and 17.23 percent between April 2019 and 2020. Thus, it is not surprising that the inflation rate moved out of the single-digit band by 2.8 percentage points to 10.6 percent in April and by 0.7 percentage points to 11.3percent in May 2020, with food inflation contributing over half to overall inflation in April (59 percent) and May (56 percent)[3].

Whereas several factors such as transportation barriers, changes in consumer choice, and seasonality of foodstuff inter alia influence changes in food prices, the lockdown, ban on public gathering, restriction of movement of persons, closure of borders in the wake of COVID-19 has undoubtedly caused significant disruptions to the food value chain, which is affecting prices of food items. According to the Ghana Statistical Service, the upward movement in inflation “… has also been triggered by the increase in food prices before and during the partial lock-down …”[4]

The April 2020 edition of the World Food Programme’s (WFP) Monthly Food Commodity Price Bulletin also reports price hikes in April 2020 compared to the same period 2019 in most markets in Ghana and this was attributed in part, to panic buying before the partial lockdown and disruptions in food supply chain during the lockdown, as a result of the COVID-19 pandemic.[5]

Photo Credit: GNA

In the same vein, transport fare for passengers from Bimbilla to Tamale increased from GHȻ20.00 before the lockdown in March to GHȻ25.00 during the lockdown period. Commenting on the impact of the restrictions on trading, a trader in Tamale lamented that the situation “…is affecting our business badly…the goods are no longer coming, we are no longer able to travel to buy the goods again. So the small goods we have, we have to increase the price”. A female trader adds that “…our business is going backward …prices of our goods have increased and customers are not willing to buy at the increased price.”Key actors of the food value chain (farmers, traders, and consumers) on the ground are complaining about the impact of COVID-19 on commodity prices, businesses, and their livelihoods. Carting of farm produce to farm centers was a challenge resulting in increased transportation costs. A farmer in Nanumba North noted that “it was difficult to get people to load produce on trucks for transport to market centers because people fear to come out due to the virus” adding that the “cost of loading 100 tubers of yam, which used to be GHȻ60.00 before the lockdown increased to GHȻ100.00 during the lockdown and it is now GHȻ80.00 since the lockdown was lifted.”

It is evident from the above analysis that the disruptions in the food supply chain resulting from the imposition of restrictions in the wake of the COVID-19 pandemic has undoubtedly contributed to the significant price increases of major staple commodities in major markets across the country. Thus, we need to take a keen interest in the movement of food prices across the country to pre-empt any adverse effects of price hikes that might arise and take necessary steps to curtail the effects. This is necessary because food prices are important for several reasons. First, they are a bellwether for pressure within the food chain, and more than normal, volatility in food price is often an indicator that something is wrong within the chain. Also, food prices affect the incomes of the supply chain actors (farmers, traders etc.) who earn their living from selling food. Thus, whereas falling food prices may be good for consumers, it can cause real economic hardship for farmers and vice versa. Perhaps, what is even more important now, as we enter the farming season, is to pay closer attention to the risk posed by the COVID-19 pandemic to food production and its impact on food security going forward.

[1] https://citinewsroom.com/2020/03/guta-warns-of-possible-shortage-of-goods-price-hikes-over-coronavirus/

[2] https://citinewsroom.com/2020/04/covid-19-food-prices-are-cheaper-now-agric-minister-claims/

[3] Ghana Statistical Service. Consumer Price Index (CPI) Newsletter, April & May, 2020.

[4] Ghana Statistical Service. Consumer Price Index (CPI) Newsletter, May, 2020.

[5] Monthly Food Commodity Price Bulletin. April 2020. https://docs.wfp.org/api/documents/WFP-0000115732/download/?iframe