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Cost of Petrol, High Demand for Grains Drive Food Prices in Africa

In Africa, prices for food are skyrocketing and putting a squeeze on the urban poor. Unlike the poor in rural areas, most city dwellers cannot grow their own food. Observers say the reasons for the increases vary – from bad weather to the rising cost of petroleum. Petrol is needed for transporting foods and for making fertilizer to increase production. From Washington, William Eagle reports.

If you ask economists or traders about the reasons for price inflation, they’ll say there’s plenty of blame to go around.

Africa is a net importer of wheat, rice and maize. But supplies on the international market are tight: more and more grain is going to feed the livestock needed to provide the growing demand for meat for the middle classes of India and China. And the diversion of some grains to produce biofuels, coupled with drought in Australia, mean the price of the grain that is available stays high.

The growing cost of fuel also affects food prices.

For much of the past year, a barrel of petrol on the world market has been over $100.00 per gallon. In Africa, that means higher fuel costs for ships bringing imported maize, wheat and rice to African ports. It also means African truckers pay more to deliver food to rural areas or to neighboring countries.

Aisha Mambo is a housewife at the market in Blantyre, Malawi. She says transportation accounts for the higher price for fish, or matemba.

"We can’t even afford to buy it every day; the price is too high" says Mambo. "Those who (sell the fish) must transport the matemba to the markets from the lake. Transportation costs are high and they have to sell it at a high price we can not afford."

Petroleum is also used to make fertilizer, which means Africa’s farmers have to pay more if they want to add nutrients to improve their crops.

Wale Ado is a farmer in Kano, Nigeria.

"We have been facing shortages of fertilizer," he says. "This rainy season, I had to pay 5,400 naira [$45.50] [for fertilizer] to cultivate tomato and other vegetables. I used to cultivate more than 500 bags of grains every year but I’m now buying grains for my family."

Drought and politics also affect food prices.

In Zimbabwe, a lack of rainfall and a controversial land reform program have increased prices and contributed to food shortages. Under the reforms, productive white-owned farms were given to allies of President Robert Mugabe and to landless blacks with little training in commercial farming.

Kenya is a food exporter and regional transportation hub for East Africa. Post-election chaos at the beginning of the year kept truckers from moving food from the port of Mombasa to Tanzania, Uganda and other surrounding countries.

The resulting food shortages have led to a hike in food prices.

Bill Khayesi sells cereals and vegetables in Jubilee Market in Kisumu in western Kenya. He says the electoral violence is also affecting this year’s crops.

Khayesi says, "By now, farmers are supposed to be harvesting beans and sunflowers. Vegetables are supposed to have been ready by now. But the post-election violence has affected farmers who were flushed from their homes and most of them are still living in [internally displaced camps]. So the very few harvested foodstuffs are not enough for everybody and that’s why prices go up in addition to high petrol prices."

In West Africa, Nigeria often exports rice and other grains to its neighbors. But poor weather conditions have produced low yields, meaning less millet or sorghum for neighboring Benin and Niger. In northern Nigeria, consumers are reported to be competing with chicken farmers for the expensive grains.

Some Africans say local politics and economics contribute to food inflation.

Habib Ndao is an economist and consultant in Dakar, Senegal.

He says six months ago he paid 50 cents for a kilogram of rice. Today it’s about 75 cents a bag. He blames the situation on a lack of competition among distributors.

"We are a liberal [free market] regime," he says, "and it is difficult for the government to use price controls. We used to have a board that controlled the traders, but this has been dismantled. There is no genuine competition [between traders] to lower the price. The rice is controlled by three to four people who have made something like a gentleman’s agreement between them, and the government can not control [the situation] easily."

Ndao says consumer groups are pressuring the government to use anti-trust laws to break up the monopoly.

Ndao says it’s cheaper for Africans to buy food from the international market, rather than trade among themselves. With improved transportation, communication and political will, he says a West African market could be established.

But today, he says, Senegal and its neighbors sell very little to each other. He gave the example of Nigeria, which buys phosphate fertilizers from the international market, rather than from other countries in the region.

"Nigeria prefers to import it from Ukraine. The price of [Ukrainian fertilizer] is cheaper than [fertilizer made in] Senegal," says Ndao. " [In addition] [some countries on] the international market sometimes dump [their cheaper goods, thus discouraging African entrepreneurs]. The Senegalese fertilizer is better, but the price is higher. So, they buy low quality fertilizers from the international market rather than from Senegal. There is also no contact between [our government] and Nigerian farmers."

Development experts say it may be hard to decrease demand for imported foods. They note that wheat consumption in Nigeria more than tripled over the past 10 years. Consumer demand is increasing the price for bread, which is often preferred over traditional foods like dumplings made from cassava root, or eba. Reports from Ghana and Senegal say consumers still prefer longer grained imported rice over domestic varieties.

Agricultural economists say part of the answer to stabilizing food prices is not only increasing domestic production, but also improving the quality of new products for Africa’s urban consumers.