Africa-Press – Namibia. Namibian retailers and economists are warning of imminent food price hikes as rising fuel costs drive up distribution expenses and impact essential commodity imports.
Ohlthaver & List (O&L) executive chairman Sven Thieme yesterday said the group predicts that high fuel prices would hit its distribution networks hard.
“For us as O&L, it’s obviously a shocker for the distribution of our products. Our distribution costs are going to increase quite dramatically,” he said.
Thieme said suppliers are also increasing their prices, and the group would need to plan for how to best deal with these shocks.
“Calls came from suppliers indicating price increases. We definitely are working around the clock, seeing what we can do, how we can counter it, and how we can make a plan. But that’s business – we always have to make a plan,” he said.
Thieme said the shock comes not only from its road transportation network, but also from increasing vessel costs – including fishing vessels – in its network.
O&L Group includes companies such as grocery chain Model, meat product company Hartlief, Namibia Dairies, and seafood company Hangana.
Woermann Brock Group, which owns grocery stores across the country, is also anticipating suppliers to increase their prices.
“We’ve received one or two letters from suppliers about price increases so far,” group general manager Braam van Niekerk said yesterday.
He said it is still unclear what the impact of the fuel price increase would be on the company.
“We’re looking at how we can best absorb the costs. We’re not going to do any price increases right now, but it might start affecting grocery prices in the next few months,” he said.
Ausspannplatz Multisave Supermarket manager ‘Yvonne’ yesterday told The Namibian that petrol price increases have already taken effect, although the full impact is not clear yet.
“Petrol prices just increased, and we are yet to receive new stock. We will only know by then,” she said.
Supermarket chain Choppies yesterday said it was waiting to see how fuel prices would affect its business.
“Everything is affected by diesel and petrol. If the prices go up, starting from the top of our supply chain, we will also have to increase our prices here and there,” Choppies logistics manager Ruben Uushona said.
Choppies’ advantage in the retail market is, however, selling at a low price, he said.
“This is actually ruining our strategy. So we want to give it some time before we make a decision. We will wait to hear from our suppliers. If our suppliers change their prices, we will be forced to change our prices too,” Uushona said.
Economist Omu Kakujaha-Matundu warns that Namibia’s dependence on South Africa for food imports makes the country highly vulnerable to fuel price shocks.
“When we talk about food, we talk about South Africa. We import almost all our food stock from there,” he says.
Kakujaha-Matundu says rising fuel prices, particularly during the harvest season, would increase production and transport costs, which are ultimately passed on to consumers.
“That increase will filter through to food prices and pass directly to Namibia,” he says.
Economist Salomo Hei says households should brace for higher costs across essential goods.
“There is definitely going to be a spike in essential commodities. Households will feel the bite,” he says.
He says low-income households, especially those dependent on social grants, will be hardest hit, while cautioning against over-reliance on state support.
Economic analyst Marius Kudumo says fuel price increases are likely to push up food prices due to higher transport costs.
“Fuel is the driver of any economy, especially for the transportation of goods. The latest increase is likely to result in higher prices of goods and services,” he says.
Kudumo says rising fuel costs will place further pressure on households.
“Inflation will rise, and the majority of people will not be able to afford basic needs such as food,” he says.
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