The Bureau of Statistics has recorded a 1% increase in the overall price level of consumer items monitored in the second quarter of the year and the rate up to June this year was 5.8%.
According to a Bureau press release yesterday this figure has reinforced the observations made at the end of the first quarter that an improvement in agricultural supplies to the market could only positively impact the Consumer Price Index (CPI). “From the 4.8% increase recorded at the end of the first quarter, prices increased by a further 1.0 percentage…so that the overall CPI, now stands at 5.8 per cent at the end of the half-year,” GINA said.
The fall in prices of fruits and vegetables, two of the heavier weighted items of the food basket in the second quarter is a significant factor in the slowdown of the CPI. April and May saw strong declines in vegetable prices of 6.3 and 9.5 per cent respectively, before the prices reversed and increased by 1.2% in June, over the May level.
The movement in fruit prices was also significant. At the end of the first quarter fruit prices were 10.8% over the December level and prices declined by 6.7 percentage points overall during the second quarter.
Following a further increase in fruit prices by 3.7% in April, prices tumbled dramatically by 9.9% in May and a further 0.5% in June.
In other major food categories cereals and cereal products which at the end of March had increased by 11.7% over December’s price levels almost doubled and at the end of the first half recorded a 22.4% increase over the December level. There were continuous price increases with this sub-category in all three months of the second quarter by about 3.9% in April, 4.4% in May and 2.0% in June, fuelled by increases in the price of rice in the said months and flour prices in May and June.
Milk and Milk products which had recorded an overall decline of 0.8% at the end of the first quarter showed somewhat of a reversal and increased by about 3.6 percentage points in the second quarter.
Therefore, half-year prices of milk products overall are 2.9% over the price levels at December. The cumulative effect of these countervailing price movements was that the food index which recorded an 8.4% increase at the end of March only moved a further 0.5% in the second quarter and stood at 8.9% at June month-end.
The Bureau said too of note was the fact that in the non-food categories there were overall price declines at the half-year in the clothing, by 1.7%; footwear and repairs by 3.5% and furniture by 0.1%.
Offsetting these were increases in the transport and communication category by 4.7%, housing by 3.8% and miscellaneous foods and services by 2.3%.
The slowdown in the rate of price increases in the second quarter is due to the fact that with food having such a heavy influence in the overall basket all of the heavy-weighted items in the food basket are locally produced thereby eliminating the effect of imported food inflation.
Also 63% of all items within the food basket are either zero-rated or VAT exempt.
