Sugar, Milk Prices Lead To Decline In Inflation

The rate at which prices increase has slowed by the lowest rate in over three years according to statistics released by the Uganda Bureau of Statistics (UBOS) today.


The annual headline inflation declined to 2.8percent in August 2014 on an annual basis compared to the 4.3percent recorded in July 2014.

Dr Chris Mukiza, the Director Macro Economic Statistics at UBOS, said that the declining trend was due to reducing prices of milk, eggs and some other vegetables in the various markets.

Supplies of these products increased on the market, with demand remaining subdued. Processed milk prices did increase as a result of 18percent Value Added Tax applied on a litre but this accounts for 10percent of the market share. Unprocessed milk prices are now at between 1000 and 1200 shillings compared to the 1500 shillings it was at in 2013.

Dr Makiza also said that sugar prices also fell during the month of August due to increasing supplies on the market.  All the factories are now fully operational and Uganda is also importing sugar.

This even after government increased the excise duty on sugar from 25 to 50 shillings in the 2014/15 National Budget. Dr Mukiza however noted that the pressure on food prices is beginning to show signs of rising, which is likely to have a significant impact on prices in the remaining part of 2014.

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