Commodity prices decline in seven weeks

Prices of monitored commodities tracked for the computation of the Esoko GNA Commodity Index (EGCI) have declined in the past seven weeks in both retail and wholesale trading, at the composite level.

Whereas the EGCI-R, which tracks commodity prices at retail trading closed the week ending August 2 at 21400 points, in the week ending September 20, the index closed at 20400, indicating a drop of 1000 points.

At the wholesale level, there was even a bigger drop in points; the index closed the week to September 20 at 17177, but closed the week ending August 2 at 18500, representing a drop of 1343 points.

The general interpretation for the decline in prices of monitored commodities, according to market watchers, is the arrival of fresh produce.

On a weekly basis though, the index value for the week ending September 20 actually represented a 318 and 136 points rise on the value for the week ending September 13 for retail and wholesale trading respectively.

These figures, considered in respect of the general market conditions show a trend of mixed price movements. The effect of commodity prices on the general economy in the next few months is however unclear.

Whereas a potential increase in utility prices and uncertainty in commodity prices, according to the Bank of Ghana pose a risk to inflation, the central bank is of the view that this could however be tempered by the upcoming harvest season and lower global inflation.

But the Bank is of the view that consumer inflation is likely to end the year outside the official target band of 9-11 per cent. Analysts are also of the view that since commodity prices have significant effect on the consumer basket for inflation calculation, the current trend of falling prices bodes well for the economy.