Hording blamed for food price spike

The Ministry of Trade and Industry says illegal traders are behind the double-digit rise in inflated prices of consumer goods. Participants at a meeting this week asked the government for a crackdown on illegal actors.
Stakeholders at the Intercontinental Hotel pointed to hoarding and shady dealers.
The Ministry held talks on a study they conducted saying that since December last year prices have been rising and by August they had gone up 15 percent, primarily due to hoarding.
“The ongoing inflation observed has no relationship with economic factors rather it is driven by economic sabotage via traders, and other actors in the supply chain,” said Fetlework Gebreegziabheir, Minister of Trade and Industry.
The study identified intervention of ‘middlemen’, a manufactured shortage of supplies of consumption goods, conducting transactions illegally and weak capacities of unions and associations as causes for the price hike on consumer goods. The participants said the government must come up with better, long-lasting solutions.
The Ministry argues that there is no shortage of consumer goods but merchants are increasing prices pretending that there is one.
Inflation has risen with regard to both food and non-food items. However, fruits and vegetables, bread and other necessities have skyrocketed over the last few months.
“The inflation mainly hurts low-income people living in urban areas”, she adds.
The Ministry plans to alleviate the problem by controlling illicit trade, engaging more in import substitution and adequately supplying locally produced consumer products.
Representatives of the attending associations responded by urging the government to support local producers so they can make more edible oil and other vital products. They also wanted the government to prosecute middlemen and other brokers acting unscrupulously.
The government recently established a high level committee to combat the rampant inflation.