January 4, 2009
PAWLOS BELETE
Although there is so much talk about declines in the prices of some food products on the market, there are many consumers who feel that the reality on the ground is that the cost of living is actually going up.
For Alemayehu Eshete, 83, and head of a family of four, once prices go up, they never go down. He is of the view of the economic term, “prices are sticky”.
But, there could be hardly someone from the merchants’ side that could agree that Alemayehu’s assertions match the reality in the recent holiday market of Addis Abeba.
Although there are those from the supply side who explain how demand and prices for various commodities have gone down, Alemayehu persistently argues that prices are actually going up.
“The price of sheep, for example, has been rising,” he told Fortune. Last Thursday, January 1, 2009, he was at the local sheep market off the Dejazmach Beyene Merid Street , in Bulgaria area, near Kera Abattoirs behind NOC’s refuelling station. When he asked the price for moderately fattened sheep, the trader told him it was 1,500Br.
“I have never heard of such a high price for a sheep in my over 40-years experience of the market as head of a family.”
However, Alemayehu seems to have forgotten one basic element of the Ethiopian retail trade system – a continuous and firm bargaining tradition.
“We set the initial price as high as we think the buyer affords and it is up to the buyer to bargain well to bring it down,” one sheep trader told Fortune.
That was exactly what the trader was doing with his unsuccessful transaction with Alemayehu. The lowest price he could have sold the particular sheep for can be between 800 and 850Br.
Contrary to Alemayehu’s assertions, traders in various markets of Addis Abeba complain about the low prices and lack of demand for their commodities. The market situation in the major traditional transaction points of the city and the holiday festive mood in downtown Addis like Bole area seem a sharply contrasting scenario.
Many malls in Addis Abeba are decorated with Christmas trees, lights and imitations of Father Christmas since a week or two before the turn of 2009. Buildings around Bole and Olympia have managed to fill the atmosphere with the sprit of festivity.
In contrast, and unlike previous years, the traditional transaction points including Merkato, Atkilt Tera (in Piasa), Adissu, Shola and Kera markets, a.k.a. gebeyas, do not signal the holiday season festivity mood. These gebeyas were normally known to be full of buyers and sellers in hot and active transactions, with lots of movement and dialogue by the market actors. This year’s Ethiopian Christmas market is way far from that spirit. The supply side of the market seems surprised with what went wrong while the demand side is forced to reduce spending.
This scenario has caused a sharp price decline in almost all of these market places as opposed to last year. A synopsis of the market situation as of last Thursday, January 2, 2009, in the markets in various corners of Addis Abeba confirms the trend.
Butter vendors in Merkato – the largest open air market in Africa – say the market has declined from last year’s same holiday season, both in price and volume.
A kilogram of butter sold for up to 110 Br this time last year but now it has dropped to as low as 60 Br. “Though the price has declined by more than 40 Br per kilogramme, there are not many buyers,” one of the vendors in the traditional butter market told Fortune. The traditional vender, who looks in her early thirties, gave her own explanation of the situation, though obviously not researched and professional. She attributes the decline on demand to the falling financial capacity of most consumers.
The price of butter is a little bit higher in Shola Gebeya, around Lem Hotel, than at Merkato where a kilogram of butter sold at 65 to 75 Br.
The hen market in Shola, however, had not started to be busy, as it used to be in previous years, by last Thursday. Traders on the small animal, in the area, recall that the Gebeya was much more active at this time last year
Alemu Teshome, 18, has been earning a living by selling hens for the past two years. He hopes more people will come to buy hens as the holiday approaches. The price of hen, which on Thursday stood between 50 to 55Br, is less than that of last year’s by 20 to 25 Br.
Decreasing prices characterise the sheep markets too.
Tesfaye Feyisa, 20, a sheep vender for the past two years around Adissu Gebeya confirms the trend.
“In previous years well ahead of the holiday, the price of sheep was cheaper,” he told Fortune. “This is mainly due to the fact that the six weeks immediately before the holiday is a fasting season for Orthodox Christians.”
This year, however, there is one more reason for the decline of the price, Tesfaye believes.
“The rise in the cost of living has weakened many urban residents so that they are shy away from buying anything beyond the very basic needs,” he gave the explanation that came to his mind from the daily interaction with consumers. That is why the market is slower than last year, he said.
The price difference in late and this years’ sheep market ranges from 40 to 100 Br.
For example an almost equal size and quality sheep that was sold for 450 Br is this year 350 Br while those worth 350 Br and the 300 Br are now selling for about 300Br and 260Br, respectively.
It is not only those directly involved in selling sheep but also those engaged in backyard slaughtering who feel the decline in the market.
Gebeyew Bayu, 27, who has been in backyard slaughtering business for the past ten years around Adisu Gebeya shares the view that the market has declined.
In the past six months, the price of sheep has been slightly declining in Shoal Gebeya as well.
The sheep market in Bulgaria area, is also in decline. From the unusually small number of people in the market, it is evident that not many people seem to be interested in buying.
“I hope the market will improve as the holiday approaches,” Asenbit Awel, a trader in sheep in the local specialized market, said.
He even anticipates a possible price increment of 50 to 100 Br.
“Many people decide to buy sheep in the last minutes before the holiday, even on the actual day itself,” he said.
Kera is one of Addis Abeba’s oxen market as well. There are already large collections with small, medium, big and extra big oxen on display in the market place. Their price ranges from 2,500 to 9,000 Br. A well nourished and heavily fattened ox may fetch more than 10,000 Br.
“There is a decline in price of about 500 to 1,000 Br,” a ox-trader in the area told Fortune.
Though sellers complain that the prices of sheep, hens, oxen and other commodities consumed highly during holidays have gone down, there are consumers, like Alemayehu, who strongly argue prices are really otherwise.
