The rate at which commodity prices on the Ugandan Market increase has declined during the month ending September 2014, according to statistics released by Uganda Bureau of Statistics (UboS).
A market in Down Town Kampala
For the first time since November 2010 prices have increased by lower than 2percent, the annual headline inflation has also declined to 1.4percent in September 2014, compared to 2.8percent in August, 4.3percent in July and 5Percent in June, 2014, figures released today indicate.
The decline is attributed to the increased production and supplies in the market. UBOS statistics indicate that food crop prices have been on a declining trend since March 2014, especially for commodities like sugar.
According to the Uganda Manufactures Association (UMA) in the first six months of 2014, sugar production was up 17.6percent to 193,000 tons. Sugar prices cost an average of Ugx 2300 down from Ugx 2500 three months ago. Notably prices have not been affected by the increase in excise duty on sugar from Ugx 25 to Ugx 50.
Dr Chris Mukiza the Director Macroeconomics told a media briefing today that the persistent decline in sugar, maize floor and rice prices contributed to decline in overall inflation.
Mukiza noted that there were significant upward price movements for kerosene, petrol and gas. He did however point out that food price pressures are continuing to prop up.
The resurgence of food prices, especially vegetables is visible in the market. Nalubega Angela, who owns a stall at the Nakasero Market, downtown Kampala said that there were some shortages driving prices upwards.
The released statistics are however exclusive of education sector figures, which Mukiza says will be featured in mid-October.
Core inflation, which excludes food prices and energy prices, also did decline 2percent, which is below the Bank of Uganda target of 5percent.
The central Bank is also expected to announce the Central Bank Rate on 14th October 2014.