Food Prices Soar in Somaliland

Hargeysa, 8 September, 2007 (SL Times) – The Somaliland Ministry of Commerce and Industry (MCI) held a meeting with major importers of foodstuffs on Monday when the prices of basic commodities doubled this week in major towns and cities in Somaliland.

Items like rice, flour and cooking oil were worst hit by unexplained ‘hyper-inflated’ prices. This week’s sudden price hikes saw the price of a sack of rice (50kg) jump from $18 to an all-high record price of $30-$32.

The price of petrol and diesel also sharply rose to sky high levels. One litre of petrol is priced today at $0.96/7, up from last week’s $0.76/8 per litre. The same ratio price increase applies for diesel and kerosene.

The Minister of MCI, Osman Qassim Qodah speaking to the local press during Monday’s meeting with the company heads of two of the biggest foodstuff importers in the country, Omaar and Indha-Deero foodstuff companies. The Minister said, “we really don’t know what has caused these sharp increases in the prices of basic foodstuffs. We are not aware of significant price increases or indexes for these commodities in the international market. For this reason we called these firms to explain to us the root cause behind these price increases. We have been informed by these firms that they are both out of stock of these commodities, and that the chain suppliers of these commodities [the wholesalers] are demanding inflated prices for the limited stocks available in the market for these commodities.”

During the MCI meeting, the press asked the executive manager of Omaar Company, Muhammad Ali to comment on the sky rocketing prices for the basic foodstuffs, and his reply was, “We have been having problems shipping our rice consignments from India because of the short supply of ships. Also, at present, India is inundated with demands for its rice stocks from former rice producing countries in the Far East who have recently had a shortfall in their rice harvests. We, at present, have large rice consignments waiting to be picked up in India and shipped out to us. While we have been looking for ships to transport our rice from India, our stock of rice became depleted.”

Nasir Abdi Awed of Indo-Deero Company, the largest importer of foodstuffs in Somaliland who was at the meeting said, “looking at today’s prices for rice, it works out, roughly, at $620 per metric ton. This price is unfair and out of order. Regardless of whatever increases accrue via world markets, it’s not possible for an increase of $200 per ton. We are out of stocks for rice and currently we are expecting a large rice consignment to reach Berbera by next week. We will not be selling this consignment at these prices, but will sell at the usual price of $20/21 per sack 50kg”.

Osman Qassim Qodah, the Minister of Commerce and Industry, stressed that there is no reason to justify a price increase for these commodities and that the ministry will take punitive action against those traders inflating prices.

Nonetheless, Total fuel suppliers have increased prices of its fuel commodities; petrol and diesel is 22% extra per litre at the fuel pumps, even though the minister has criticized this price increase.

Source: Somaliland Times