Ugandan manufacturing hit by higher prices

March 10, 2017 in Business, Trade & Industry by Editor

The scarcity of sugarcane saw the prices of sugar rise by 25.9% which affected several industries.

March 10–Customers paid more for manufactured goods by 3.0 percent in January compared to the same period last year due to higher prices for inputs.

In the food sector, the latest Producer Price Index (PPI) for manufacturing released by the Uganda Bureau of Statistics (UBOS) shows increased prices for sugar affected several other processing segments.

Peter Opio, the Director, Business and Industry Statistics at UBOS said prices for manufacturing have been increasing since November 2016 by 2.4 percent and December by 3.3 percent throughout the period ending January 2017.

He said the increment of the PPI to 3.0 percent to increases in the different sector groups which include the Processed Food industry by 5.4 percent, chemical products by 12.7% and the metal products by 5.3 percent.

“The scarcity of sugarcane saw the prices of sugar rise by 25.9% hence the increment in the prices for processed foods. On the other hand, the period also witnessed an increment in the price of processed coffee by 18.4% due to increased demand for African coffee on the International market while the price of processed tea increased by 12.8 percent,” Opio said.

He said for chemical and metal products, the increment in prices was driven by a rise in the cost of raw materials attributed to the deprecation of the shilling. “The cost of some of the products exported is in dollars, but when the goods reach here, their value has to be changed into local shillings and depending on the exchange rate, the price may either go up or lower. This also affects prices of certain products hence the increments witnessed,” Opio said.

Opio is however optimistic that the rains the country is experiencing now may positively impact on the price increments which were mainly caused by low production of crucial raw materials needed in the manufacturing industry, especially if the manufacturers do not have to struggle to acquire raw materials when plenty are available.