Border closure and food inflation? 5 & 6.

The latest inflation data was released this week and the effects of the border closure are beginning to be apparent with regards to food inflation. As I mentioned in my last update, September was the worst September since at least 2009 when you look at monthly changes in food prices. The latest data show that the trend continues with this October also the worst October since 2009. Altogether more worrying when you remember that this should be the harvest period and food prices should at least be flat.

For October…

And to refresh your memory, for September…

It is not clear that this is about the late rains either. If it was you would expect to see the same effects in August and maybe even in July. But you don’t.

For August…

For July…

So it is probably not the late ending to the rainy season causing this. It is not monetary policy either as there has not been any real change in policy since January. The only culprit is the land border closure.

And the borders are still closed. So we should probably expect the worst November and maybe the worst December too.

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